1st International Conference on Emerging Trends in Scientific Research 15-16 March, 2014 Pearl International Hotel Kuala Lumpur, Malaysia

1. Abstract of Emerging Trends in Scientific Research, 2014, Vol.1
DOI: 10.18488/journal.1002/2014.1/1002.1
1st
International Conference on Emerging Trends in
Scientific Research
15-16 March, 2014
Pearl International Hotel Kuala Lumpur, Malaysia
Conference Website: www.pakrdw.com
20
Paper ID: 83/14/1
st
ICETSR
Government Ownership and Corporate Tax Avoidance:
Empirical Evidence from Malaysia
Ibrahim Aramide Salihu1
--- Siti Normala Sheikh Obid2
--- Hairul Azlan Annuar3
1
Candidate, Department of Accounting, International Islamic University Malaysia
2,3
Department of Accounting, International Islamic University Malaysia
Abstract
While there have been substantial improvements in the performance of Government-
linked Companies (GLCs) in Malaysia in the recent past, their tax planning activities
remain a mystery. With government supports, GLCs seem to benefit more from tax
avoidance practices. Given this, and in line with the call on investigating the role of
government ownership in corporate tax planning by Hanlon and Heitzman (2010), this
study investigates the influence of substantial government ownership on corporate tax
avoidance. The data for the investigation came from the top 100 Malaysian companies
based on FTSE tradable index over a three-year financial periods. The results of the
system GMM estimation of dynamic panel data models using four similar measures of tax
avoidance show an inconclusive finding. The relationship between government ownership
and corporate tax avoidance is documented for only two of the measures. A further
qualitative enquiry is therefore suggested for a better understanding of the scenario.
Keywords: Government ownership, Corporate tax avoidance, Endogeneity, Generalized methods of
moment, Malaysia.