Factors affecting tax leakages: Evidence from Philippine publicly listed companies

Date of Publication

2013

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Accountancy

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Thesis Adviser

Florenz C. Tugas

Defense Panel Member

Alger C. Tang
Alloysius Joshua S. Paril

Abstract/Summary

Government funds are collected from the taxpayers. These budgets are used to serve for the common good of the public. Without earning the sufficient funds, government activities or projects will not be achieved and public service will be shortened. Taxes are not only used to serve the public but are also the source for financing of a country’s debts and needs. Insufficient collection of taxes will lead to economic downtown, and can cause the country to incur more debt. This inadequacy may be caused by the ineffectiveness of the government in exercising their power, or the companies’ intentions of decreasing the required tax payments. Either of these two will lead to tax leakage, which is defined as the tax not collected by the government or the tax not paid by the taxpayer.

This study aims to know what factors can significantly impact tax leakage and up to what extent it can be affected. Factors such as total assets, share price, divided payout ratio, ratio of independent board of directors, amount change in audit fees, and external auditors, which are divided into the four 2Big Four3 firms while other auditing firms are aggregated and termed as 2Others,3 of companies publicly listed in the Philippines Stock Exchange (PSE) for all the years from 2007 – 2007 are explored in this study. These variables are further examined and analyzed using the random model of panel regression to understand the impact they have on tax leakage.

The results showed that dividend payout ratio and amount change in audit fees do not have a significant impact on tax leakage. However, total assets, share price, ratio of independent board of directors, and all the external auditors have a significant impact on tax leakage. Being able to identify which variables affect the tax leakage, taxing authorities will have a better view and knowledge regarding the possible tax leakage that may occur, and will be more careful in regulating the collection of taxes.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU18233

Shelf Location

Archives, The Learning Commons, 12F, Henry Sy Sr. Hall

Physical Description

107 leaves ; 28 cm.

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