Search Results (47)

This study investigates how the hydrogen supply chain should be designed under alternative carbon tax scenarios to decarbonize heavy-duty freight transportation. A bi-objective, multi-period optimization model is developed to minimize the total daily system cost while constraining CO₂ emissions using the Augmented ε-constraint approach, thereby revealing the trade-off between economic and environmental objectives. The model was applied to Türkiye’s heavy-duty transportation sector and solved under zero, moderate, and aggressive carbon tax scenarios. The results show that the levelized cost of hydrogen (LCOH) ranges from 2.06 to 14.06 $/kg H₂. High carbon pricing increases the LCOH by 29.06% in hybrid designs, while raising the renewable energy share from 2.04% to 46.97% in centralized supply chains. Sensitivity analysis reveals that a ±20% variation in electrolyzer-based production costs does not alter the network topology but shifts the LCOH between 13.10 and 15.02 $/kg H₂ in emission-focused solutions. The findings indicate that in renewable-energy-based decentralized structures, higher carbon tax policies primarily increase the LCOH. Still, the overall technology mix and network topology remain largely unchanged compared to the no-tax case. However, in centralized supply chains, carbon pricing affects both the energy sources and selected technologies. By integrating Türkiye’s 2030–2053 policy milestones into a multi-period framework, this study distinguishes itself by providing a comprehensive, multi-period planning framework tailored to the economic and logistical realities of developing countries. Unlike existing models, our approach quantifies how evolving carbon tax trajectories decisively drive infrastructure investment by analyzing the direct impact of different tax levels on the operational and strategic decisions of heavy-duty transport. This research represents the first joint assessment of carbon tax policy instruments and the evolution of long-term hydrogen supply chains, offering a decision-making framework for policy-driven energy transitions in similar emerging economies. Full article

This study examines whether stricter enforcement of mandatory social insurance contributions affects corporate income tax behavior in China. In the Chinese institutional context, mandatory social insurance refers to payroll-based employer and employee contributions to five statutory programs: basic pension insurance, basic medical insurance, work-injury insurance, unemployment insurance, and maternity insurance. These programs are directly related to social sustainability because they finance old-age income security, medical protection, workplace injury compensation, unemployment support, maternity protection, and labor-market stability. Using China’s 2018 social insurance collection reform as a quasi-natural experiment, we analyze A-share listed companies from 2014 to 2024 through a difference-in-differences design based on differential exposure between private firms and state-owned enterprises. To assess the reliability of the identification strategy, we employ firm and year fixed effects, event-study analysis, placebo tests, alternative measures of tax avoidance, and propensity score matching difference-in-differences robustness checks. The findings show a tax-fee seesaw effect: private firms subject to extensive regulatory scrutiny respond to more rigorous enforcement of social insurance contributions by increasing corporate income tax avoidance. Analysis of the mechanisms shows that the Whited-Wu index of financial constraints partially explains this phenomenon. The effect is more pronounced in firms with higher labor costs and greater administrative expense intensity, indicating that the increased response is driven by labor cost exposure and organizational discretion. By contrast, the effect is weaker among firms audited by the Big Four accounting networks—Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG—indicating that high-quality external audits constrain aggressive tax planning. Regionally, the effect is most pronounced in eastern China, where markets, labor costs, and tax-planning services are more developed. The findings contribute to the sustainable development literature by demonstrating that reforms designed to strengthen social insurance sustainability can unintentionally weaken tax compliance if payroll contributions, tax administration, and corporate financial pressures are not coordinated. The study highlights the importance of integrated fiscal governance for achieving socially sustainable and fiscally balanced development. Full article

Corporate tax avoidance has become a major governance and fiscal sustainability concern, particularly in developing economies where corporate tax revenues constitute a critical source of public financing. While prior research suggests that board gender diversity (BGD) enhances ethical oversight and monitoring, its effectiveness in constraining aggressive tax planning may depend on firms’ informational and technological environments. This study examines whether artificial intelligence (AI) capability strengthens the governance role of BGD in reducing corporate tax avoidance. Using a balanced panel of 1586 non-financial firms from developing economies over the period 2009–2023, the analysis employs firm FE models and dynamic two-step System GMM estimations to address unobserved heterogeneity, endogeneity, and the persistence of corporate tax behavior. The results indicate that BGD is positively associated with effective tax rates, implying lower levels of corporate tax avoidance. Furthermore, AI capability—measured using a lagged specification—significantly strengthens this relationship, suggesting that firms with higher AI adoption exhibit a stronger governance effect of gender-diverse boards on tax compliance. Additional robustness tests—including alternative tax avoidance measures, alternative BGD specifications, heterogeneity analysis, and selection-bias corrections using Heckman, propensity score matching (PSM), and instrumental variable (2SLS) approaches—confirm the stability of the findings. Overall, the results highlight the complementary role of technological capability and board diversity in strengthening corporate governance (CG) and fiscal discipline in developing economies. Full article

Transfer pricing has become a major channel through which multinational enterprises shift profits across countries. This study examines the macroeconomic and institutional determinants of transfer pricing in seven European economies (France, Spain, Germany, the United Kingdom, Italy, the Netherlands, and Portugal) over the period 1985–2025. The main objective is to identify the key factors influencing profit shifting and to analyze the mechanisms through which multinational firms allocate profits across jurisdictions. The study employs panel data techniques and uses two different proxies to capture transfer pricing practices (trade-based and intangible-based channels). To analyze both long-run and short-run relationships between transfer pricing, exchange rate dynamics, foreign direct investment, inflation and institutional quality, the analysis relies on heterogeneous panel estimators and cointegration tests, supported by several robustness checks. The empirical results reveal the existence of a long-run relationship between transfer pricing and its macroeconomic and institutional determinants. Exchange rate fluctuations and inflation exert a negative effect on transfer pricing, whereas Foreign Direct Investment has a positive impact by expanding multinational investment networks and intra-group transactions. The effect of institutional quality, proxied by control of corruption, appears more heterogeneous and may vary across jurisdictions as well as across the type of transfer pricing channel, whether related to tangible trade or intangible assets. These results emphasize the importance of institutional quality and international tax coordination in limiting aggressive profit-shifting practices. Full article

Aggressive corporate tax avoidance represents a significant fiscal and governance challenge in developing economies, where public revenues are critical for sustainable development and enforcement capacity is often uneven. This study examines whether environmental, social, and governance (ESG) performance constrains corporate tax avoidance and whether this relationship is conditioned by national institutional quality. Using a multi-country panel of 2464 publicly listed non-financial firms from 14 developing economies over the period 2015–2023, the analysis employs fixed-effects estimation, dynamic System GMM, and instrumental-variable (2SLS) techniques to address unobserved heterogeneity and endogeneity concerns. The results indicate that stronger ESG performance is associated with significantly lower levels of tax avoidance; however, this effect is highly contingent on institutional quality. ESG exerts a substantive disciplining role primarily in governance-strong environments characterized by effective regulation and credible enforcement. Heterogeneity analyses further reveal that the ESG–tax avoidance relationship is driven mainly by the governance and environmental pillars, is more pronounced among large firms, varies across regions, and strengthens over time as ESG frameworks mature. In contrast, the social ESG dimension and smaller firms exhibit weaker or insignificant effects, consistent with symbolic compliance in low-enforcement settings. By integrating stakeholder, legitimacy, agency, and institutional theories, this study advances a context-sensitive understanding of ESG effectiveness and helps reconcile mixed findings in the existing literature. The findings offer policy-relevant insights for regulators and tax authorities seeking to strengthen fiscal discipline and development financing in developing economies. Full article

Tax-aggressive behavior by firms can undermine tax revenues, corporate transparency, and overall economic governance. Corporate governance mechanisms are increasingly recognized as critical tools for mitigating such behavior, particularly in emerging markets such as Morocco. This study investigates how corporate governance structures influence the reduction in tax aggressiveness in a developing-country context, while also assessing the moderating role of audit quality. Using financial data from firms listed on the Casablanca Stock Exchange, the hypotheses are tested through OLS regression with firm and year fixed effects to examine the impact of board characteristics and audit quality on tax aggressiveness. The results show that the separation of the CEO and chairman roles and larger board size significantly reduce tax-aggressive behavior. Moreover, audit quality strengthens the negative relationship between board size and tax aggressiveness, with higher-quality audits further constraining aggressive tax practices. Additionally, ownership concentration is associated with higher tax aggressiveness, reflected in lower effective tax rates, whereas board independence exhibits no significant association with tax aggressiveness (p-value = 0.500879). Overall, the findings suggest that robust corporate governance and high-quality audits effectively mitigate tax-aggressive practices among Moroccan listed firms. This study contributes novel evidence from the Moroccan context, highlighting governance structures and audit mechanisms most effective at curbing such behavior. Policymakers and regulators are encouraged to promote stronger governance frameworks and enhance audit quality standards, while firms should reinforce these mechanisms to improve tax compliance and transparency Full article

This study examines how socialization costs, inspection costs, collection costs, motor vehicle tax rates (Pajak Kendaraan Bermotor, PKB), vehicle ownership transfer tax rates (Bea Balik Nama Kendaraan Bermotor, BBNKB), the Corruption Perception Index (CPI), and the Indonesian Digital Society Index (Indeks Masyarakat Digital Indonesia, IMDI) influence regional tax compliance across 34 provinces in Indonesia, using secondary data from 2020 to 2024. Guided by Fiscal Federalism, Tax Optimization Theory, and the Fischer Tax Compliance Model, the analysis integrates spatial regression and SWOT to capture both structural and spatial dynamics in provincial tax administration. The spatial error model reveals that socialization costs, PKB, and BBNKB significantly shape provincial tax compliance. At the same time, the other variables show no measurable effect. Spatial clustering indicates High–High compliance in Central Java, Low–Low compliance in South Sumatra and Lampung, and Low–High compliance in North Sumatra. The SWOT assessment places Indonesia’s provincial tax compliance strategy in Quadrant I, suggesting strong institutional capacity and substantial external opportunities to support aggressive improvement strategies. This study contributes by providing province-wide empirical evidence on the fiscal and administrative determinants of compliance and by incorporating collection costs and spatial relationships into the analysis. Policy implications include strengthening targeted socialization, improving rate-setting mechanisms, and expanding digital reporting systems to enhance taxpayer understanding and administrative transparency. Full article

This study aims to investigate the impact of digital transformation on corporate tax avoidance. In fact, this revolution has pervasively affected firms in different aspects and represents a significant opportunity to modernize their internal processes, bringing alongside a set of challenges that they must overcome. One hypothesis posits that digitalization enhances information transparency and internal control, reducing tax avoidance, while the other one suggests that the increase in digitalization leads to more complex and opaque transactions, leaving avenues for more aggressive tax strategies. This paper uses data of listed firms in the Casablanca Stock Exchange from 2020 to 2024, excluding the financial sector due to its specific tax regulation, leaving a final sample of 56 companies and 272 firm-year observations. It applies an OLS regression to assess the relation between the two variables, controlling for a set of firm and governance characteristics. The aim of the article is to address the scholarly debate by providing insights into an emerging economy where there is little research on the subject. The findings reveal that digital transformation contributes to the decrease in corporate tax avoidance in conjunction with governance variables like the presence of independent directors on the board and the duality of a CEO position, strongly supporting the first hypothesis. Notably, the OLS regression results show that an increase in digitalization by 1 point is associated with a decrease of 40.4755 in the book-tax differences, significant at the 5% level. The results provide high support for firms to invest in technologies in order to optimize their internal processes and improve their data quality; it also calls for tax authorities to strengthen their digital audit capacities and integrate data-driven tools to detect and interpret signals of potential tax-aggressive strategies. Full article

This study investigates the relationship between corporate governance mechanisms and tax avoidance in Greek service-sector firms over the period 2014–2023. Using panel data, the analysis evaluates the influence of board characteristics, audit committees, auditor quality, and ownership structures on firms’ tax behavior. The results reveal that traditional governance mechanisms—such as board size, independence, audit committee composition, and gender diversity—do not significantly constrain tax avoidance, reflecting the formalistic rather than substantive adoption of governance practices in Greece. In contrast, external audit quality and ownership structure emerge as critical determinants. Engagement with high-quality auditors, particularly Big 4 firms, is associated with reduced tax aggressiveness, while state ownership similarly curbs avoidance, consistent with reputational and political accountability incentives. Conversely, managerial and foreign ownership are positively related to aggressive tax planning. The findings underscore the contextual nature of governance effectiveness: in weak enforcement environments, formal mechanisms serve largely symbolic roles, whereas external oversight and ownership incentives carry greater weight. This study contributes to agency and institutional theory by highlighting the limits of formal governance reforms absent substantive independence and enforcement. Full article

This paper examines the effect of board characteristics on tax avoidance and the moderating role of industry regulation on this effect. Using a comprehensive panel of 84,153 firm-year observations from 39 countries during the period of 2000–2023, we illustrate that larger boards, higher female representation, significant foreign ownership, and the presence of independent directors are generally associated with higher effective tax rates, suggesting lower levels of tax avoidance. This study further demonstrates that the effects of board gender diversity and board independence are more pronounced in regulated industries, where stringent governance and ethical standards prevail, emphasizing the importance of regulatory oversight in mitigating aggressive tax planning. These findings are crucial for policymakers, regulators, and corporate governance practitioners aiming to align corporate practices with ethical standards and reduce the risks associated with tax avoidance. Full article

Auditing stands to be a strong enforcement mechanism in bringing tax compliance, safeguards public revenue and is strongly influenced by communication between auditors and audited taxpayers. This present work studied the opinions of auditors of the auditing body of the Public Revenue Research and Assurance Services (Y.E.D.D.E.) in order to investigate the communication between them and the taxpayers in the context of the preventive audit. Primary research was conducted. Findings from previous research were utilized and a questionnaire was used to collect primary data. The survey was conducted all over Greece by randomly sampling 120 auditors. This study provides useful insights for policymakers and implies that investigating the causes of taxpayers’ aggressiveness, providing lifelong education to auditors, enhancing collaboration between auditors and the fairness and efficiency of the tax system would have a beneficial effect on the communication between tax auditors and taxpayers and thus on tax compliance. Full article

This study examines the moderating role of female audit committee chairs on the relationship between audit quality (measured by audit fees) and corporate tax avoidance. The analysis is based on 165 UK firms between 2011 and 2021 using static panel data regression models and Lewbel’s heteroscedastic identification method to check robustness. The findings highlight the significant role of audit quality in reducing corporate tax avoidance. In addition, the female audit committee chair strengthens the negative relationship between audit quality and tax avoidance. This study has many implications. For corporate governance, it shows the value of female leadership in audit committees, especially in curbing aggressive tax strategies. Firms should increase female representation in key roles, like audit committee chairs, to improve oversight and ethical financial practices. For regulators and policymakers, it supports the case for strengthening gender diversity mandates to improve corporate transparency and accountability. Tax authorities can use the fact that firms with strong audit quality and female-led audit committees are less likely to engage in tax avoidance to focus their audits on companies with weaker governance structures. Full article

This study investigates the effect of audit committee characteristics on the level of tax aggressiveness. Drawing on a sample of 72 French listed firms from the SBF120 index for the period from 2015 to 2022, this study measures the level of tax aggressiveness through the effective tax rate (cash ETR). The descriptive statistics, correlation matrix, variance inflation factor (VIF), and feasible generalized least squares (FGLS) regression were used for analysis of panel data. The findings reveal that measures of the independence of the audit committee, expertise of the audit committee, and audit committee size are significantly linked to tax aggressiveness. The findings also highlighted that the frequency of audit committee meetings is weakly linked to tax aggressiveness. The effectiveness of audit committee members can send a strong signal to the tax authorities, the shareholders, regulators, and the investors who are concerned about the risk of tax aggressiveness. This study contributes to the existing literature aimed at exploring the effect of audit committee characteristics on tax aggressiveness in a French context. This study has several implications for regulators, policymakers, and academia. It helps the policymakers and regulators in policy reforms who aim at combating aggressive tax practices in France, which is one of the primary objectives within the European Union (EU) framework. Full article

Nowadays, businesses in Ukraine face new challenges that the world has never experienced before. Earlier, during the war, countries had to curtail their economic activities, everything operated for the sake of military needs. However, now, within hybrid wars, the country’s economy and its actors have to demonstrate rapid adaptive models and changes in strategies, and sometimes function without strategies at all. Advanter Group conducted a survey of 696 Ukrainian enterprises in the period from 20 December 2023 to 8 January 2024 (a year of full-scale aggression); a direct questionnaire method was used. Key hypotheses (10 hypotheses) regarding the resilience factors of Ukrainian businesses during the period of the full-scale invasion were tested using statistical analysis methods. Statistically significant differences were established in various aspects of the functioning of SMBs. Based on the research, it is concluded that reforms in the legal sphere, aimed at facilitating conditions for business and protecting the rights of enterprises, are an urgent necessity for the further development of the economy of Ukraine. Practical recommendations arising from the research are presented, including reducing the level of uncertainty for business, revising the tax system, creating incentives for the development of SMBs, and increasing the transparency and stability of the conditions for resource mobilization. Several key principles of the national policy aimed at facilitating conditions for the development of entrepreneurship and anti-corruption are also suggested. Full article

Currently, the UK has ambitious plans to reach net zero by 2050, despite other countries such as Russia and India targeting 2060 and 2070, respectively. Assuming that the UK emissions unceasingly decline at a given rate annually towards achieving net zero by 2050, its economy would need to ensure a reduction of 105 MtCO2 per year of its emissions from the current 2021 levels. Given that global greenhouse gas emissions have not peaked and continue to rise, the UK seeks to implement costly and aggressive emission reduction policies towards fulfilling commitments under the 2021 Glasgow Climate Pact. This paper investigates the effect of environmental taxes on environmental degradation in the UK between 2000Q1 and 2019Q4 using novel Fourier approaches. Using the novel Fourier ARDL estimator, the long-run equilibrium estimates indicate that gross domestic product and environmental tax cause a fall in carbon emissions. However, in trade and primary energy use, a unit change caused rising carbon emissions in the UK. Especially, the results indicate that environmental taxes have a negative effect on environmental degradation in the UK, and ecological tax policy could be considered as an effective channel to attain environmental sustainability. The outcome provides the following policy insights: (i) The government of the UK should support international environmental tax coordination mechanisms, especially on carbon pricing, to avoid relocation of carbon-intensive investments. (ii) The UK government must note that imposing more taxes to encourage emissions reductions could bring complexity to the tax system and unnecessarily bring costly ways to deal with climate change. Higher domestic electricity prices could disproportionately hit low-income households and create distributional cost concerns, which require benefit payouts or compensation schemes. (iii) Switching to electric vehicles simultaneously requires investments in charging infrastructure and battery technologies. To avoid this chicken-and-egg problem, the government of the UK could play a coordinating role, including deploying targeted subsidies, regulations, direct government involvement, or setting higher carbon prices in special cases. Full article