A Theoretical Review on Corporate Tax Avoidance: Shareholder Approach versus Stakeholder Approach


Mohanadas, Nirmala Devi and Ramasamy, Suganthi and Abdullah Salim, Abdullah Sallehhuddin (2019) A Theoretical Review on Corporate Tax Avoidance: Shareholder Approach versus Stakeholder Approach. Journal of Finance and Banking Review, 4 (3). pp. 82-88. ISSN 2636-9176

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Objective – Although corporate tax avoidance is a widely discussed topic in the literature, conflicts do emerge when it is analyzed through the context of primary corporate duty. Should companies, in managing their taxes, solely honor their obligation to increase shareholders’ wealth or should they cater to the interests of all their stakeholders? Such conflicts are especially evident in the inconsistent empirical observations on how corporate tax avoidance relate to corporate social responsibility (CSR), which makes the dearth of theoretical analysis on this issue even more conspicuous. Taking into account the socio-political nature and human elements in corporate tax avoidance, theoretical analyses from social sciences’ perspectives are becoming markedly crucial. Methodology/Technique – This paper critically reviews the extant literature for discussions on how corporate tax avoidance is influenced by the dissenting approaches towards primary corporate duty. Findings – By allowing an insight into how people act and the world they live in, these analyses form a constructive tool to rationalize and foretell managerial actions towards shareholders and stakeholders alike. Novelty – It focuses particularly on the theories that are widely used to lend supports for such approaches. These theories are the agency theory, stakeholder theory, and legitimacy theory. Type of Paper: Review

Item Type: Article
Uncontrolled Keywords: Corporate Tax Avoidance, Corporate Social Responsibility (CSR), Theoretical Analysis, Shareholder Approach, Stakeholder Approach, Agency Theory, Stakeholder Theory, Legitimacy Theory.
Subjects: H Social Sciences > HF Commerce > HF5001-6182 Business > HF5601-5689 Accounting. Bookkeeping
Divisions: Faculty of Business (FOB)
Depositing User: Ms Suzilawati Abu Samah
Date Deposited: 10 Mar 2022 02:06
Last Modified: 10 Mar 2022 02:06
URII: http://shdl.mmu.edu.my/id/eprint/9304


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