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Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]

The purpose of this study is to investigate the impact of government institutional shareholdings via government-linked investment companies (GLICs) on tax aggressiveness strategies of Malaysian government-linked companies (GLCs). This study uses effective taxes rate (ETR) and tax paid to operating c...

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Main Authors: Abdul Rahman, Rahayu, Mahmud, Nur Farizan Mazhani, Zaini, Naimah, Meor Zawawi, Maizura
Format: Article
Language:English
Published: Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM) 2018
Subjects:
Malaysia
Online Access:http://ir.uitm.edu.my/id/eprint/29524/1/29524.pdf
http://ir.uitm.edu.my/id/eprint/29524/
https://apmaj.uitm.edu.my/
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spelling my.uitm.ir.295242020-04-07T03:24:27Z http://ir.uitm.edu.my/id/eprint/29524/ Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.] Abdul Rahman, Rahayu Mahmud, Nur Farizan Mazhani Zaini, Naimah Meor Zawawi, Maizura Malaysia The purpose of this study is to investigate the impact of government institutional shareholdings via government-linked investment companies (GLICs) on tax aggressiveness strategies of Malaysian government-linked companies (GLCs). This study uses effective taxes rate (ETR) and tax paid to operating cash flow (TPOC) as proxies of tax aggressiveness. The GLCs will be classified as tax aggressive firms if the ETR and TPOC are less than the corporate statutory tax rates. Using a sample of 75 firm-year observations of Malaysian GLCs listed on Bursa Malaysia from 2010 to 2014, this study finds that GLCs are less likely to engage in tax aggressive. The findings show that there is a significant and negative relationship between GLICs shareholdings and tax aggressiveness. The evidence suggests that GLICs are the effective government institutional investors in mitigating tax aggressive strategies of their portfolio firms. In addition, this study provide empirical evidence to highlight the commitment of GLICs in protecting government revenues by avoiding aggressive tax planning in their portfolio firms in order to assist government’s social and political objectives. This study is one of the few studies that examine the effectiveness of GLICs monitoring in mitigating tax aggresiveness in GLCs. This study extend prior studies by using both conforming and non confirming measures of corporate tax avoidance andsegregating GLICs shareholding into two categories; Federal Government Pension Investment Funds (FGPIF) and other GLICs (OFGLIC). Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM) 2018-12 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/29524/1/29524.pdf Abdul Rahman, Rahayu and Mahmud, Nur Farizan Mazhani and Zaini, Naimah and Meor Zawawi, Maizura (2018) Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]. Asia-Pacific Management Accounting Journal (APMAJ), 13 (3). pp. 149-166. ISSN 2550-1631 https://apmaj.uitm.edu.my/
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Malaysia
spellingShingle Malaysia
Abdul Rahman, Rahayu
Mahmud, Nur Farizan Mazhani
Zaini, Naimah
Meor Zawawi, Maizura
Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
description The purpose of this study is to investigate the impact of government institutional shareholdings via government-linked investment companies (GLICs) on tax aggressiveness strategies of Malaysian government-linked companies (GLCs). This study uses effective taxes rate (ETR) and tax paid to operating cash flow (TPOC) as proxies of tax aggressiveness. The GLCs will be classified as tax aggressive firms if the ETR and TPOC are less than the corporate statutory tax rates. Using a sample of 75 firm-year observations of Malaysian GLCs listed on Bursa Malaysia from 2010 to 2014, this study finds that GLCs are less likely to engage in tax aggressive. The findings show that there is a significant and negative relationship between GLICs shareholdings and tax aggressiveness. The evidence suggests that GLICs are the effective government institutional investors in mitigating tax aggressive strategies of their portfolio firms. In addition, this study provide empirical evidence to highlight the commitment of GLICs in protecting government revenues by avoiding aggressive tax planning in their portfolio firms in order to assist government’s social and political objectives. This study is one of the few studies that examine the effectiveness of GLICs monitoring in mitigating tax aggresiveness in GLCs. This study extend prior studies by using both conforming and non confirming measures of corporate tax avoidance andsegregating GLICs shareholding into two categories; Federal Government Pension Investment Funds (FGPIF) and other GLICs (OFGLIC).
format Article
author Abdul Rahman, Rahayu
Mahmud, Nur Farizan Mazhani
Zaini, Naimah
Meor Zawawi, Maizura
author_facet Abdul Rahman, Rahayu
Mahmud, Nur Farizan Mazhani
Zaini, Naimah
Meor Zawawi, Maizura
author_sort Abdul Rahman, Rahayu
title Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
title_short Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
title_full Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
title_fullStr Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
title_full_unstemmed Government-linked investment companies' shareholdings and tax aggressiveness / Rahayu Abdul Rahman... [et al.]
title_sort government-linked investment companies' shareholdings and tax aggressiveness / rahayu abdul rahman... [et al.]
publisher Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA (UiTM)
publishDate 2018
url http://ir.uitm.edu.my/id/eprint/29524/1/29524.pdf
http://ir.uitm.edu.my/id/eprint/29524/
https://apmaj.uitm.edu.my/
_version_ 1685650529951154176
score 13.211869

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