I've been looking for arguments recently that support the idea of shareholders including taxation in their companies CSR reports. Here is one of the most interesting arguments I have come across so far....
Traditionally, the difficulty in incorporating taxation into a social responsibility agenda has stemmed from the presumed tension between shareholders and tax collectors. Tax payments have historically been viewed as a transfer from shareholders to the state. Within such a framework, it is difficult for corporations to publicize their tax payments proudly. More recently, these difficulties have been accentuated by developments in financial engineering and globalization that make limiting tax payments cheaper and more efficient. Any effort by CSR advocates to highlight tax avoidance would seem to detract from the interests of shareholders.
Yet, this framework may not be an accurate way to think about corporate tax avoidance. An emerging body of evidence makes clear that shareholders and tax collectors share a common interest in containing opportunistic managers. This link stems from the realization that the corporate tax system makes the state the largest minority shareholder in corporations and that the technologies of tax avoidance may also assist managers in defrauding shareholders. In short, tax avoidance demands obfuscation and this obfuscation can become the shield for actions that are not in the interests of shareholders or tax authorities.
Indeed, anecdotal and systematic evidence shows that corporate tax avoidance is often linked to acts of managerial malfeasance. Moreover, corporate tax avoidance is not fully valued in the stock market by investors, presumably in light of its connection with possibly increased managerial malfeasance. Generally, research points to the benefits of tax enforcement as a means to further the shared interests of shareholders and tax collectors.
Why shareholders should want taxation policies included in CSR Reporting..
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