Athira A, Ramesh Vishnu K
Indian Institute of Management Bangalore, Bengaluru, Karnataka 560076, India.
Indian Institute of Management Rohtak, Sunaria, Rohtak, Haryana 124010, India.
Int Bus Rev. 2023 Aug;32(4):102143. doi: 10.1016/j.ibusrev.2023.102143. Epub 2023 May 9.
Governments across the globe initiated various tax reforms in the post- Global Financial Crisis period to rein in aggressive corporate tax avoidance for managing budget deficits. These developments created new realities in the international business environment by altering the costs and benefits of corporate tax management. Yet, we have a limited understanding of the effectiveness of tax reforms in controlling corporate tax avoidance at the global level. COVID-19 offers a litmus test for how corporates manage their taxes during the pandemic in light of past tax reforms. We use financial constraints and reputational costs as two contradicting theoretical perspectives to explain corporate tax avoidance during the crisis. Consistent with the financial constraints hypothesis, we find that firms avoid taxes amid COVID-19 to prevent liquidity crunches. Our study also highlights the role of country-level information and governance quality in curbing tax avoidance during extreme events like COVID-19. Our findings call for an immediate tax policy intervention to limit corporate tax avoidance during the ongoing pandemic phases.
全球各国政府在全球金融危机后启动了各种税收改革,以遏制企业激进的避税行为,从而管理预算赤字。这些发展通过改变企业税收管理的成本和收益,在国际商业环境中创造了新的现实情况。然而,我们对全球层面税收改革在控制企业避税方面的有效性了解有限。鉴于过去的税收改革,新冠疫情为企业在疫情期间如何管理税收提供了一个试金石。我们将财务约束和声誉成本作为两种相互矛盾的理论视角,来解释危机期间的企业避税行为。与财务约束假说一致,我们发现企业在新冠疫情期间避税以防止流动性紧缩。我们的研究还强调了国家层面信息和治理质量在遏制新冠疫情等极端事件期间避税行为中的作用。我们的研究结果呼吁立即进行税收政策干预,以限制当前疫情阶段的企业避税行为。