The impact of corporate governance characteristic on tax compliance among public listed companies in Malaysia

• Main Author: Azniyati, Md Ralib
• Format: Dissertation
• Language: English; English; English
• Published: 2018
• Subjects: HJ4771.6 Income Tax. Tax Returns.
• Online Access: https://etd.uum.edu.my/8818/1/S819505_01.pdf; https://etd.uum.edu.my/8818/2/S819505_02.pdf; https://etd.uum.edu.my/8818/3/s819505_references.docx; https://etd.uum.edu.my/8818/

Corporate income tax is the largest source of revenue to Inland Revenue Board of Malaysia (IRBM). Hence, the increase of tax non-compliance among corporate taxpayers concerns IRBM and tax authorities globally as the government loses its major revenue which adversely affects the economy. Tax evasion of large corporations using accounting manipulations implies the potential role of corporate governance against tax non-compliance. Therefore, this study attempts to determine the impact of corporate governance characteristic to tax compliance among corporate taxpayers specifically the public listed companies in Malaysia. This study was conducted on 111 tax audited cases of public listed company listed on the main market of Bursa Malaysia that had been finalised by IRBM for year of assessment 2013 and 2014. Data from their annual report were then used to determine the corporate governance characteristic of each public listed companies namely (1) board composition (2) independent director service tenure (3) separation of chairman and Chief Executive Officer (4) audit committee competency (5) non-audit service by external auditor and (6) sourcing internal audit function. Next, three models of tax compliance were developed specifically filing, reporting and payment compliance to better capture different compliance issues. Logistic regression results revealed that director service tenure has significant impact on tax compliance where public listed company with an independent director who have been in service for more than 9 years are more likely to be filing compliant. Whereas public listed company with an independent director who have been in service for less than 9 years are payment compliant. However, this study only sampled a small number of public listed companies. Therefore in order to generalize the findings due care should be exercised. This research findings contributes an added value to tax literature and tax authorities on the impact of corporate governance characteristic to specific type of tax compliance of public listed companies in Malaysia.