Over on TheCorporateCounsel.net, Liz blogged about the potential emergence of a new way to look at corporate taxation. She states that a shift may be underway from the concept of corporate “tax burden” to “tax impact” and that Boards should probably add “public backlash” to the list of risks they consider during tax planning conversations.
Liz points to a recent ISS ESG report that concluded
– Corporate tax avoidance is a major ESG issue, but disclosure on responsible tax practices is noticeable by its absence.
– Responsible investors are increasingly taking into account the implications of fair taxation for social issues such as global inequality, particularly given an increased focus on outcomes-based investing and stakeholder capitalism.
It is difficult enough for companies to determine the societal impact of their own operations and direct contributions. Expecting them to do so for the taxes they pay to governments that then make independent decisions about deploying that revenue borders on the absurd. This is a matter worth monitoring.