Shareholder’s political motive and corporate tax avoidance

This paper describes the relationship between shareholder’s political motive and corporate tax avoidance using the Fraud-Risk Theory framework. Many corporate shareholders around the world actively participated in their country’s political arena, either as politicians or as donors to political parti...

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Main Authors:	Suryo Utomo, Mohd Rizal Palil, Romlah Jaffar, Rosiati Ramli
Format:	Article
Language:	English
Published:	Fakulti Ekonomi dan Pengurusan 2015
Online Access:	http://journalarticle.ukm.my/9583/ http://journalarticle.ukm.my/9583/ http://journalarticle.ukm.my/9583/1/7229-33165-1-PB.pdf

id	ukm-9583
recordtype	eprints
spelling	ukm-95832016-12-14T06:50:22Z http://journalarticle.ukm.my/9583/ Shareholder’s political motive and corporate tax avoidance Suryo Utomo, Mohd Rizal Palil, Romlah Jaffar, Rosiati Ramli, This paper describes the relationship between shareholder’s political motive and corporate tax avoidance using the Fraud-Risk Theory framework. Many corporate shareholders around the world actively participated in their country’s political arena, either as politicians or as donors to political parties. In order to maintain their political activities, they need easy, cheap and large sources of funds. One of the possible sources of funds is the undisbursed income tax payment to the government. However, this predicament has aroused the suspicion of taxation authorities on the extent of shareholder’s corporate tax compliance. Since corporate tax avoidance and shareholder’s political motives are attached to two different entities (corporations and individuals), it is not possible to measure the direct relationship between the variables. However, in this case the relationship will be partially measured. The first part measures the relationship between corporate ownership and corporate tax avoidance, and the second part measures the relationship between shareholder’s political motive and his ownership in the corporation. Results from multivariate data analysis show that there are significant relationships between variables in both partial relationships. Therefore, this study concludes that shareholder’s political motive is negatively related to corporate tax compliance level, and shareholder’s political motive is considered as factor that has significant negative influence on corporate tax avoidance’s decision. Fakulti Ekonomi dan Pengurusan 2015 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/9583/1/7229-33165-1-PB.pdf Suryo Utomo, and Mohd Rizal Palil, and Romlah Jaffar, and Rosiati Ramli, (2015) Shareholder’s political motive and corporate tax avoidance. Asian Journal of Accounting and Governance, 6 . pp. 27-36. ISSN 2180-3838 http://ejournal.ukm.my/ajac/issue/view/748/showToc
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	This paper describes the relationship between shareholder’s political motive and corporate tax avoidance using the Fraud-Risk Theory framework. Many corporate shareholders around the world actively participated in their country’s political arena, either as politicians or as donors to political parties. In order to maintain their political activities, they need easy, cheap and large sources of funds. One of the possible sources of funds is the undisbursed income tax payment to the government. However, this predicament has aroused the suspicion of taxation authorities on the extent of shareholder’s corporate tax compliance. Since corporate tax avoidance and shareholder’s political motives are attached to two different entities (corporations and individuals), it is not possible to measure the direct relationship between the variables. However, in this case the relationship will be partially measured. The first part measures the relationship between corporate ownership and corporate tax avoidance, and the second part measures the relationship between shareholder’s political motive and his ownership in the corporation. Results from multivariate data analysis show that there are significant relationships between variables in both partial relationships. Therefore, this study concludes that shareholder’s political motive is negatively related to corporate tax compliance level, and shareholder’s political motive is considered as factor that has significant negative influence on corporate tax avoidance’s decision.
format	Article
author	Suryo Utomo, Mohd Rizal Palil, Romlah Jaffar, Rosiati Ramli,
spellingShingle	Suryo Utomo, Mohd Rizal Palil, Romlah Jaffar, Rosiati Ramli, Shareholder’s political motive and corporate tax avoidance
author_facet	Suryo Utomo, Mohd Rizal Palil, Romlah Jaffar, Rosiati Ramli,
author_sort	Suryo Utomo,
title	Shareholder’s political motive and corporate tax avoidance
title_short	Shareholder’s political motive and corporate tax avoidance
title_full	Shareholder’s political motive and corporate tax avoidance
title_fullStr	Shareholder’s political motive and corporate tax avoidance
title_full_unstemmed	Shareholder’s political motive and corporate tax avoidance
title_sort	shareholder’s political motive and corporate tax avoidance
publisher	Fakulti Ekonomi dan Pengurusan
publishDate	2015
url	http://journalarticle.ukm.my/9583/ http://journalarticle.ukm.my/9583/ http://journalarticle.ukm.my/9583/1/7229-33165-1-PB.pdf
first_indexed	2023-09-18T19:55:17Z
last_indexed	2023-09-18T19:55:17Z
_version_	1777406488567873536

Shareholder’s political motive and corporate tax avoidance

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