Tax avoidance over time: Insights from the incentivised corporate taxpayer; [Unikanie podatków z czasem: Wnioski z zachęty podatnika korporacyjnego]

• Published in: Polish Journal of Management Studies
• Main Author: Hamzah A.F.H.; Hamid N.A.; Zawawi S.N.M.
• Format: Article
• Language: English
• Published: Czestochowa University of Technology 2021
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85121977500&doi=10.17512%2fpjms.2021.24.1.08&partnerID=40&md5=b9d0ffd8c872cd0ec9c79f6128dc3f27

An incentivised firm that pays low tax may not be engaging in fraudulent management, as generally assumed. However, it could have been due to tax avoidance strategies observed through reduced or lowered Effective Tax Rate (ETR) across ten years. Therefore, this research investigated the time trend of ETR over ten years and the determinants associated with the trend among firms with incentives. This paper focuses on tax avoidance strategies applied by corporate firms in Malaysia that utilised Reinvestment Allowance (RA) tax incentives. Results showed only a minimal increase of 0.2 per cent with low ETR averages of 6.47 per cent over a decade. Findings from this study on the consistent low tax sustained by firms with incentives throughout ten years could be due to tax exemption from numerous generous tax incentives and having taxpayers exploit the loopholes of the taxation system. © 2021, Czestochowa University of Technology. All rights reserved.