If you take George Osborne’s plan for tax transparency to its natural conclusion, where do you end up? The answer is Norway, where details of every taxpayer’s annual income, wealth and annual tax return are publicly available — and it’s not a new thing. Norwegian tax returns have been publicly available since the 1800s, the idea being that financial transparency is seen a vital part of social democracy. Figures were traditionally released every October in a Yellow Pages-style book, available for anyone to read at the local town hall or tax office.
As the internet evolved, they decided to take things online. The government initially came up with the idea of a searchable database of peoples’ finances which launched in 2005, and which allowed media organisations to reproduce the lists online. Visit, for instance, skattelister.no, a website run by the Norwegian tabloid paper Verdens Gang, on which Norwegians can be listed in order of tax payment.
The annual release of tax returns turned into a frenzy — which some Norwegians referred to as ‘tax-porno’ — as people scrambled to find out just how much that dentist next-door earned, and papers ran their annual analysis of footballers’ and politicians’ incomes.
Unsurprisingly, the arrangement created controversy, and stories of criminals using the tables to plan their next burglary, and complaints about inaccurate figures. The Norwegian government have now come up with a new database, which requires users to log-in, and which the media are banned from reproducing on their own sites. Sweden has similar rules, and its tabloids are full of stories like ‘See the top 30 millionaire women in your city’. Such transparency is a godsend to journalists.
So are Norwegians happy? Just last week one Norwegian won a court case against the state in which he claimed that the publication of his tax return in 2010, which included inaccurate information, was in violation of his human rights. The Swedes have also had to change their method of releasing tax returns, changing in 2011 from an open list to a system whereby information can only be obtained if a person has a ‘legitimate need’ for it.
The Norwegian system promotes financial transparency, that can’t be denied. But privacy and financial confidentiality are also factors which the Chancellor may like to consider in his quest for transparency.