Tax Disclosure Practices of Malaysian Listed Companies

Noraza Mat Udin and Nor Shaipah Abdul Wahab

As tax is the main source of the Government’s revenue, the payment of corporate taxes does have community and societal implications in helping to fund the provision of public goods. However, disclosure of tax information in the companies’ annual report is limited and complex besides there was a significant gap between the amount of accounting and taxable income (BTDs) of Malaysian listed companies. This research aims to investigate tax disclosure practices by Malaysian listed companies. Specifically, this research examines the tax disclosure behaviour within Malaysian large companies across years, companies and industries regarding the adjustments made related to BTDs. All data is hand-collected from company annual report which covers 561 Bursa Malaysia public listed companies for six-year period from 2010 to 2015. The results show that in terms of the disclosure behaviour across years, the timeline trends of the score reveals narrow deviations of the score between years, suggesting minor fluctuations of scores across the sample period but there are variations in the level of tax disclosures across companies and industries as shown in large dispersions of the distribution trends of the score across industries. The findings assist to improve the tax disclosure practices and contribute to Government policy in relation to increase private sectors’ commitments (through taxation) in ensuring sustainability of public benefits and ensuring better people’s quality of life.

Volume 11 | 05-Special Issue

Pages: 770-779