Date of Publication

7-27-2023

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Accountancy

Subject Categories

Business Administration, Management, and Operations | Taxation

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Thesis Advisor

Aaron C. Escartin

Defense Panel Chair

Mark Vincent B. Bendo

Defense Panel Member

Daven E. Cabonce

Abstract/Summary

This study employed panel data regression analysis to determine the moderating effect of corporate governance on the relationship between business strategy and tax avoidance of Philippine PLCs from 2010 to 2019. Although tax avoidance is legal, it poses a risk to the government’s mandate to collect taxes as a motive power to operate. With this, there arises a need to understand the effect of the strategies employed by PLCs on their tax avoidance in order to guide the government. Likewise, the moderating role of corporate governance is examined to provide valuable insights to the management and investors of PLCs. A sample size of 627 firm years was employed. The firm years were classified as Defender, Prospector, and Analyzer based on the composite measure of business strategy. The study calculated the variables of the measure using a five-year rolling average. On the other hand, this study used Cash Effective Tax Rate (CETR) and Accounting Effective Tax Rate (AETR) as tax avoidance measures. The study also used board independence, board size, audit quality, and audit tenure to gauge corporate governance. The results of the study reveal that business strategy does not impact CETR but has a significant impact on AETR. Meanwhile, none of the corporate governance measures employed moderates the relationship between business strategy and CETR. However, board independence has a negative significant impact on the relationship between Prospector companies and their AETR. In contrast, board size and audit quality have a positive significant impact on the relationship between Defender companies and their AETR.

Abstract Format

html

Language

English

Format

Electronic

Keywords

Tax planning—Philippines; Corporate governance—Philippines

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Embargo Period

8-11-2023

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