ISSN: 2225-8329
Open access
Tax avoidance may result in a substantial loss of government revenue and detract from the planning of national growth. Companies employ a variety of tax avoidance schemes to evade tax, and companies from different industries may have varying tax incentives and degrees of tax avoidance practices. Therefore, this study investigates tax avoidance activities among companies in different sectors in Malaysia. It also seeks to examine the impact of the code of corporate governance on tax avoidance activities. This study uses four proxies to measure tax avoidance; Accounting ETR (AETR), Cash ETR (CETR), Tax Expenses to Operating Cash Flow (TECF), and Cash Paid to Operating Cash Flow (CPCF). Using a sample of listed companies in Bursa Malaysia from 2005-2015, this study discovers that tax avoidance activities are significantly affected by the industrial sectors. The result finds that manufacturing companies, Infrastructure Project Companies (IPC) and hotels pay significantly lower effective tax compared to the other companies in different sectors. Additionally, the study also finds evidence that the code of corporate governance in 2012 has significantly been successful in mitigating the tax avoidance activities among listed companies in Malaysia. It contributes to the literature by providing empirical evidence on the influences of Malaysian Industrial Master Plan 3 on companies' tax avoidance activities.
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In-Text Citation: (Mahmud et al., 2022)
To Cite this Article: Mahmud, N. M., Kamaruddin, N. N. A. N., Adam, A., Raman, S. A., & Shaari, S. N. M. (2022). The Influence of The Industrial Sector and Reviewed Corporate Governance Code on Tax Avoidance Practices in Malaysia. International Journal of Academic Research in Accounting Finance and Management Sciences, 12(3), 419–429.
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