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学术前沿讲座——A Tale of Two Taxes: Does Corporate Income Tax Avoidance Undermine the Role of Environmental Taxation in Promoting Environmental Sustainability?



A Tale   of Two Taxes: Does Corporate Income Tax Avoidance Undermine the Role of   Environmental Taxation in Promoting Environmental Sustainability?








Environmental taxation aims to improve firms’ environmental performance   by increasing the cost of polluting. We find that highly polluting Chinese   firms increase income tax avoidance to offset additional costs caused by   China’s Environmental Protection Tax Law. This effect is stronger for firms   with greater financial constraints, firms in provinces with higher   environmental tax rates and greater emphasis on environmental protection and   firms with lower income tax avoidance prior to the law. Further, while the   environmental tax on average improves polluting firms’ environmental   performance at the cost of their financial performance, these effects are   muted for firms that increase income tax avoidance. Overall, our findings   suggest that the role of environmental taxation in promoting environmental   sustainability is undermined by firms’ income tax avoidance. Our study   provides important policymaking implications by identifying an unintended   consequence of environmental taxation and showing how different taxes interact   with each other.




Kaishu Wu is a professor at the School of Accounting and Finance,   University of Waterloo (Canada). Kaishu Wu received his Ph.D. in Accounting   from the Lundquist College of Business, University of Oregon. Kaishu’s   general research interests lie in corporate tax planning, tax and financial   reporting and corporate tax policy. Kaishu’s research has been published in   leading academic journal, such as The   Accounting Review(UTD 24). He is also referees for famous academic   journals, such as The Accounting Review(UTD 24), Journal of Accounting, Auditing, and Finance, Journal of the American Taxation Association, etc.