CORPORATE TAX RESPONSIBILITY: AN EMPIRICAL ASSESSMENT OF GOVERNANCE MECHANISMS

Abstract

CSR research has placed a significant focus on the environmental and social pillars, while the economic pillar has received relatively little attention. Corporate taxation has profound social value within the economic pillar but has primarily been ignored. The increasing size, power, and globalization of modern organizations have paved the way for tax avoidance practices, which is why we have seen several high-profile tax avoidance cases. This has increased the institutional and governmental calls upon organizations to acknowledge their 'corporate tax responsibility' (CTR). Since CTR is still in its nascent phase, understanding its determinants will help us comprehend the structures, policies, and governance practices necessary for corporate discourses on tax responsibility. Therefore, this study aimed to explore the impact of board composition, ownership structure, and audit committee on CTR disclosure by utilizing theoretical perspectives from financial reporting and CSR. To do so, this study uses generalized least squares (GLS) regression on 150 Pakistani listed companies for the 12 years from 2009 to 2020, resulting in 1800 firm-year observations.