Responsible Business Practices

Introduction

The financial space strives to comply with regulations. The market is equitable when the regulators countercheck all business owners’ activities. Tax compliance, favorable working conditions, and workplace sustainability are invaluable business practices. Violating these business practices has adverse societal effects, such as financial instability in developing countries. Researchers attribute the deaths of about 5.6 million children between 2000 and 2015 due to tax evasion and related unethical financial practices (Slemrod, 2019). However, organization practices can be improved through periodic scrutiny and revision of the policies to ensure they are well applied (Dowling, 2014). For instance, strategic development goals have been criticized as an effort to rebrand existing and uncompetitive corporate social responsibility practices rather than developing problem-solving approaches. Ideologies such as classical liberalism, however, advocate for market freedom to enable individuals’ economic independence. It ensures the liberty to create new products, create wealth and control the market processes. This should, however, be achieved under the strict supervision of regulatory bodies to prevent the exploitation of citizens (Swain, 2018). Modern social liberalism is a rectified and favorable version of classical liberalism since it protects the citizens’ interests. This literature evaluates the financial practices of the Big Four companies. It looks into the business practices in the general world market and narrows it to the Big Four companies. It also looks at corporations established to ensure a fair business world. The FairTrade Foundation strives to leverage business world conditions. It regulates the production processes to ensure farmers’ development. It also prevents their exploitation (Discetti et al., 2020). The Fair Trade Foundation keeps companies in check on equitable business practice obligations.

Tax compliance

Business operation laws include tax compliance. Tax compliance entails the whole procedure, including income reporting, calculation, and payment. However, the specific country’s regulation determines the ease of tax compliance programs. For instance, countries with more extensive tax codes increase the complexity of the tax payment process. The tax payment also evolves over time to evaluate multi-layer taxes that may burden the citizens (Marandu et al., 2015). Companies have different tax payment procedures from individuals. Businesses must remit property, sales, and professional taxes, contributing to smooth operations. There should be utmost clarity between regulatory bodies and companies to ensure familiarity with changes in the tax submission systems. Tax compliance allows for achieving organization goals and the country’s sustainability programs. The Big Four Companies are international organizations caught amid unethical financial practices such as tax evasion (Dowling, 2014). Unlike tax evasion, tax avoidance minimizes income tax paid by a business. It thrives on claiming numerous deductions and credits. Tax evasion is, however, unethical and is practiced through false deductions and financial underreporting. Business entities such as The Big Four companies have deliberately practiced tax evasion behind the falsification of tax avoidance. The financial firm was associated with offering unlawful financial schemes. Such financial establishments should ensure strict compliance to provide market fairness.

Tax compliance can be achieved by enforcing stringent follow-up procedures in business establishments. It is vital to enact legislations that counteract deliberate or ignorance-motivated tax evasion cases. (Slemrod, 2019) suggests a four-dimensional tax monitoring procedure. It should include registration in the tax submission systems, timely filing, accurate reporting in the filing, and timely payment of tax obligations. Tax compliance is achieved by identifying non-compliance risks, assessing the involved risks, and determining the implementation procedures. Regulatory bodies should also establish a comprehensive compliance model which factors in business, industry, economic, sociological, and psychological. The current accounting practices allow for cooperation through information exchange and multinational audits. Establishing global standards for recording and publishing data useful in tax declaration procedures is further less costly. This seeks to balance business compliance with the tax and the revenue authority running a monitoring program. Voluntary compliance has proved less expensive in the long run. It is thus more effective to develop an inclusive tax compliance program. (Slemrod, 2019) suggests a specifically tailored program that reflects a country’s administrative capacity, development, and level of tax abuse. For developed nations with more revenue-generating corporations and higher defaulters, a more stringent compliance program will help achieve the regulators’ goals. Regulators should thoroughly evaluate expected compliance outcomes. For instance, the compliance targets should be measurable, achievable, and relevant in their areas of implementation. Tax compliance is further achieved through risk identification. Risk identification ensures the population is appropriately proportioned concerning compliance abilities (Slemrod, 2019). For instance, the population can be segmented as business entities, government institutions, and non-profit organizations. Lastly, there should be continuous tax policy improvement that promotes favorable jurisdictions to encourage compliance.

Favorable workplace conditions and workplace sustainability

Business practices should be considerate of everyone involved in the production chain. It ensures the end products’ profits trickle down to the farmer or producer at the start of the supply. Favorable workplace conditions prevent worker exploitation. International establishments such as the FairTrade Foundation work with entities such as farming co-operatives, governments, and businesses to protect farmers’ rights (Discetti et al., 2020). It devises social, economic, and environmental standards companies can achieve to ensure competent business practices. It also certifies products and ingredients to assure consumers of the company’s compliance with ethical business practices while producing its products. FairTrade creates public awareness through sensitization against unjust ideals. It looks into the production processes of popular foods in the internal markets. For instance, it analyzes the production process of the United Kingdom, such as bananas, coffee, and cocoa (Disccetti et al., 2020). FairTrade Foundation advocates for the competitive remuneration of women in the cocoa production industry in Cote d’Ivoire and Ghana. This foundation has achieved adequate compensation through established campaigns. Several techniques have been intermarried by the current to ensure a fair payment system that embraces employee liberty. Research relates favorable pay systems to increased business productivity and employee satisfaction (Discetti et al., 2020). Businesses should conduct an in-depth industry study to ensure fair pay practices. Members of management should also maintain an equitable payment environment by establishing a compensation committee that will constantly review the business remuneration policies.

Businesses have enacted workplace sustainability through corporate social responsibility practices. They participate in environmentally friendly ideals such as carbon accounting. However, these aspects are subject to criticism. Researchers look into sustainable development goals as an attempt to rebrand existing and inadequate cooperate social responsibility practices rather than act on prevalent social and environmental crises(Swain, 2018). Corporate social responsibility ensures a business’s compliance with its physical and social environment. It minimizes the business effects on the surrounding by encouraging long-term solutions to challenges its surroundings encounter. Major business establishments practice their corporate social responsibility through environmental conservation programs and increased support for socio-economic and environmental sustainability practices. Sustainable development goals have leveraged corporate social responsibility practices to ensure they uphold the interests of upcoming generations (Swain, 2018). Corporations practice safe business operations to ensure their contribution to achieving a secure environment. The increasing pressure for businesses to develop appealing, sustainable development goals has distracted some business establishments from their primary goals. The sustainable development goals undermine immediate action. Researchers critique this approach since it’s so far stretched mainly focused on targets such as 2030. They demand even more practical short-term solutions that will guarantee the achievement of the expected long-term goals (Swain, 2018). Sustainable development goals are also believed to have ignored the prevalent inequalities in the current international system. There is a need for influential firms in the business sphere to promote equity and encourage the inclusivity of lesser financial establishments. Business organizations should promote a more equitable local approach that is lesser concentrated on a bureaucratic and top-down focus. This will ensure a drift from the traditional imposition and encourage inclusivity in developing the SDGs. It is also challenging that SDGs are dreams and not solid goals since they are non-existent laws that penalize failure to their achievement (Swain, 2020). There should be more binding agreements that tie the business establishment to the accomplishment of its proposed goals. Finally, inadequate data to actualize the implementation of the SDGs promotes an enormous challenge to some businesses. It also poses a challenge to the bodies developing competent business policies.

Conclusion

Responsible business practices ensure an accommodating environment to carry out trade. They eliminate fool play and promote equality which promotes economic development. Tax compliance promotes accountability in the commerce sphere. Regulators must scrutinize all the industry players to ensure they comply with the taxation system. Adverse tax evasion considerably affects society’s economic development and the company’s general reputation. Tax compliance will be achieved through well-tailored compliance and follow-up programs. The programs should effectively analyze the characteristics of the respective implementation environment, such as compliance rate, amount of revenue generated, and the overall economic development level. More developed and high-revenue generation sectors will require vigorous compliance programs due to the likelihood of gross evasion. Moreso, the business sphere thrives on favorable workplace conditions and sustainability programs. Organizations such as the Fair Trade Foundation are at the forefront of promoting a fair business sphere. It sensitizes the public and liaises with business and government bodies to encourage worker welfare through the supply chain. Worker equality and ethical practices along the supply chain promote competitive business ideals that improve productivity and cumulative economic development. However, business sustainability approaches such as sustainable development goals should be intensely scrutinized. These purported business sphere solutions should be hinged on inclusivity, equality, and practical solutions to the economic and social crises.

References

Alm, J., 2019. What motivates tax compliance? Journal of Economic Surveys, 33(2), pp.353-388. https://onlinelibrary.wiley.com/doi/abs/10.1111/joes.12272

Discetti, R., Anderson, M. and Gardner, A., 2020. Campaign spaces for sustainable development: a power analysis of the Fairtrade Town campaign in the UK. Food Chain, 9(1), pp.8-28. http://eprints.bournemouth.ac.uk/37016/

Dowling, G.R., 2014. The curious case of corporate tax avoidance: Is it socially irresponsible? Journal of Business Ethics, 124, pp.173-184. https://link.springer.com/article/10.1007/s10551-013-1862-4

Marandu, E.E., Mbekomize, C.J. and Ifezue, A.N., 2015. Determinants of tax compliance: A review of factors and conceptualizations. International Journal of Economics and Finance, 7(9), pp.207-218. https://www.academia.edu/download/81448188/5070605ff959fa05b17b0542b8823814023c.pdf

Slemrod, J., 2019. Tax compliance and enforcement. Journal of Economic Literature, 57(4), pp.904-954. https://www.aeaweb.org/articles?id=10.1257/jel.20181437

Swain, R.B., 2018. A critical analysis of the sustainable development goals. Handbook of sustainability science and research, pp.341-355. https://link.springer.com/chapter/10.1007/978-3-319-63007-6_20

Responsible Business Practices

Introduction