Corporate governance and tax compliance of publicly listed companies in the Philippines

Creator

• Hans Theo S. Ramirez, De La Salle University, DasmarinasFollow
• Jhulliane Kiss A. Mijares, De La Salle University, Dasmarinas
• Alyson Jane D. Constantino, De La Salle University, Dasmarinas
• Marwel B. Toledo, De La Salle University, Dasmarinas
• Jacob Marius L. Tolentino, De La Salle University, Dasmarinas
• Elma L. Mallorca, De La Salle University, Dasmarinas

Issue Date

10-2025

Abstract

Corporate tax compliance is the key to the development of the economy. Annual effective tax rate is applied in this study to identify what corporate governance mechanisms—shareholders, management, and corporate social responsibility (CSR) strategy—are responsible for inducing tax compliance. A panel regression analysis of 20 listed companies in the Philippines from 2012-2023 has shown that the sole determinant of corporate tax compliance is CSR strategy. Effective CSR practices help firms to minimize tax avoidance by paying the appropriate corporation tax rate mandated by law. This is an example of how CSR can enhance ethical financial behavior. This study integrates stakeholder, agency, tax compliance, and corporate governance theories to show that regulations which promote CSR are a major driver of enhanced tax compliance. In other words, the study shows that businesses are more likely to comply with tax laws if they are urged to conduct themselves responsibly. Regulatory bodies should refine tax enforcement frameworks while fostering corporate responsibility. Companies may be encouraged to also file CSR reports to entice investors, uphold responsibilities, and maintain good public relations. Furthermore, future research should explore additional corporate governance variables, longitudinal studies and sector-specific analyses, comparative studies, and considering behavioral aspects of governance and decision-making processes.

Source or Periodical Title

UP Los Baños Journal

Volume

23

Issue

3

Page

1-22

Document Type

Article

Language

English

Subject

Corporate governance, Corporate social responsibility, Tax compliance, Panel regression analysis, Ethical financial behavior

Recommended Citation

Ramirez, Hans Theo S.; Mijares, Jhulliane Kiss A.; Constantino, Alyson Jane D.; Toledo, Marwel B.; Tolentino, Jacob Marius L.; and Mallorca, Elma L., "Corporate governance and tax compliance of publicly listed companies in the Philippines" (2025). Journal Article. 6432.
https://www.ukdr.uplb.edu.ph/journal-articles/6432