Government ownership and corporate tax avoidance: empirical evidence from Malaysia
While there have been substantial improvements in the performance of Government-linked Companies (GLCs) in Malaysia in the recent past, their tax planning activities remain a mystery. With government supports, GLCs seem to benefit more from tax avoidance practices. Given this, and in line with t...
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| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Pak Publishing Group
2014
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/36089/1/hairul_azlan.pdf http://irep.iium.edu.my/36089/ http://pakinsight.com/?ic=book_detail&id=3 |
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| Institution: | Universiti Islam Antarabangsa Malaysia |
| Language: | English |
| Summary: | While there have been substantial improvements in the performance of Government-linked Companies
(GLCs) in Malaysia in the recent past, their tax planning activities remain a mystery. With government
supports, GLCs seem to benefit more from tax avoidance practices. Given this, and in line with the call
on investigating the role of government ownership in corporate tax planning by Hanlon and Heitzman
(2010), this study investigates the influence of substantial government ownership on corporate tax
avoidance. The data for the investigation came from the top 100 Malaysian companies based on FTSE
tradable index over a three-year financial period. The results of the system GMM estimation of the
dynamic panel data models using four similar measures of tax avoidance show an inconclusive
finding. The relationship between government ownership and corporate tax avoidance is documented
for only two of the measures. A further qualitative enquiry through personal interview sessions with
ten tax auditors of IRBM was conducted to better understand the scenario. The results of the analysis
of responses show a similar inconclusive finding. It was therefore concluded that Malaysian GLCs are
somehow complex in tax related matters. Following this conclusion, GLCs in Malaysia need to be
more transparent in tax compliance matters to restore the public confidence |
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