Journal article
ESG Performance and Corporate Tax Aggressiveness in Australia
Australian Tax Review, Vol.54(4), pp.221-240
2025
Abstract
This study examines the association between environmental, social, and governance (ESG) performance and corporate tax aggressiveness among publicly listed Australian firms using a comprehensive data set from 2009 to 2024. Drawing on stakeholder and legitimacy theories, we find that higher ESG performance, particularly in the social dimension, is significantly linked to lower tax aggressiveness. Using Refinitiv ESG scores and a peer-adjusted tax aggressiveness measure (TA_GAAP), the analysis remains robust to alternative measures and extensive controls. Policy relevance is notable. For the Australian Taxation Office, social ESG indicators could enhance Justified Trust risk assessments. The findings also support integrating tax transparency metrics into ESG reporting frameworks for Treasury and standard setters. Boards and executives can align social responsibility initiatives with prudent tax strategies to strengthen compliance, investor confidence, and stakeholder trust. The study reinforces the view that responsible tax conduct is essential to sustainable corporate practice in the Australian context.
Details
- Title
- ESG Performance and Corporate Tax Aggressiveness in Australia
- Authors/Creators
- Dr Terri Trireksani, CA - Murdoch University, Murdoch Business SchoolGeri HadrianHafiz Yasir Ali
- Publication Details
- Australian Tax Review, Vol.54(4), pp.221-240
- Publisher
- Thomson Reuters (Professional) Australia Limited
- Identifiers
- 991005852585907891
- Copyright
- © Thomson Reuters
- Murdoch Affiliation
- Murdoch Business School
- Resource Type
- Journal article
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