Corporate Tax Avoidance and Evasion and Its Effect on Development; Forms of Corporate Tax Avoidance, What Has Been Done, to What Effect, Why so Little Has Been Done and What Can be Done?

We try to understand the genesis and evolution of corporate tax avoidance and evasion; why corporate tax avoidance and evasion have come under the political and public spotlight as well as to the forefront of the debate around international corporation tax system in the recent past; and how corporate tax avoidance and evasion are impacting the lives of people in developed and the developing countries. Also, we review the strategies adopted by the corporations for corporate tax avoidance and evasion and try to get some idea about the magnitude of corporate tax avoidance associated with each strategy. Further, we present a critical and comprehensive review of the strategies that have been suggested in the existing literature; the actual steps taken by the countries and international bodies to curtail corporate tax avoidance and evasion; the loopholes/limitations/problems in the steps taken to address corporate tax avoidance and evasion; and how the suggested measures/initiatives (actual measures/initiatives) can help (have helped) in curtailing corporate tax avoidance and evasion. Moreover, we analyze why so little has been done to curtail corporate tax avoidance and try to explain the reasons using – political economy (both at the level of interest of group of countries as well as interest of individual countries); and the concepts of regulatory and cognitive capture. Based on a detailed review of the – strategies of the MNCs to avoid and evade taxes; the steps already taken by countries and international bodies, the loopholes/limitations/problems in these steps, and the outcome of these steps – we finally document a set of suggestions for curtailing corporate tax avoidance and evasion.