-Will the Minister of Finance promise that extended country-by-country reporting will be based on transparency with regard to the eight key accounting figures requested by the general public?, Hans Olav Syversen (Christian Democratic Party) asks the Minister of Finance.
Hans Olav Syversen, a member of the Norwegian parliament (“Stortinget”) and of its Standing Committee on Finance and Economic Affairs, has submitted a written question to Minister of Finance Sigbjørn Johnsen (Labour Party): He asks for the coming Norwegian Transparency Act to be based on real accounting figures, to ensure access to information for the general public, as well as credible and open reporting.
The Ministry of Finance is expected to imminently publish its proposal for a Transparency Act governing extended country-by-country reporting. This will require the Government to take a view on whether the general public shall get access to the real accounting figures requested, or to an alternative set of figures of unknown provenance. PWYP Norway has repeatedly emphasised that such reporting needs to be linked to the consolidated financial accounts, as it will otherwise be difficult to have confidence in the information, whilst the implementation of said reporting will be more expensive than necessary.
The question from Mr Syversen is worded as follows:
Question?: The consultative round on extended requirements for country-by-country reporting initiated by the Ministry of Finance has been concluded, and the publication of a legislative proposal is expected to be imminent, as the provisions are scheduled to enter into effect on 1 January 2014. It is important in this context to ensure that real accounting figures are disclosed. Will the Minister of Finance promise that the Transparency Act on extended country-by-country reporting will be based on transparency with regard to the eight key accounting figures requested by the organisation Publish What You Pay (PWYP) in Norway?
Reasoning: ?Some consultative feedback, media reports and letters to the Ministry of Finance may appear to indicate that the working group appointed by the Ministry of Finances has disregarded the most appropriate source for obtaining financial information, i.e. the consolidated financial accounts of a company. Some stakeholders would like scope for modifications that allow the reporting to be decoupled from the key figures of the consolidated financial accounts. This may impair access to information for the general public, and thus the value of country-by-country reporting. ?The Ministry of Finance working group recommends extended country-by-country reporting requirements. This means that companies will not only be required to disclose tax payments in the countries in which they operate, but also to present these in context. The working group refers to Publish What You Pay Norway’s proposal for extended country-by-country reporting, and then goes on to recommend «reconciliation» against the annual consolidated financial accounts, which is not what PWYP Norway is recommending. ?So-called «reconciliation» may result in less insight into real accounting figures. PWYP Norway is therefore proposing that the key figures from the annual financial accounts be broken down by country, which may be done in the form of notes to the consolidated financial accounts. In order for taxes to be presented in context, it is important for the following eight key accounting figures to be broken down on a country-by-country basis: Investments, production volumes, income, costs (purchases of goods and services, wages and other operating costs) and taxes.? This would mean that only real accounting figures are reported, i.e. figures that automatically match the key figures in the consolidated financial accounts. Such reporting will be credible, understandable, transparent and comparable, which will be in the interest of the general public.
The Minister of Finance has six days to reply.
Update: See what the Minister of Finance replied here
Photo: Christian Democratic Party