Corporate Tax Planning across Industries: An Analysis of Effective Tax Rates in Malaysia

Noor Emilina Mohd Nasir (), Siti Nasuha Muhmad, Najihah Marha Yaacob, Siti Nurhazwani Kamarudin, Norfadzilah Rashid and Mustapha Jamiu
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Noor Emilina Mohd Nasir: Universiti Teknologi MARA Cawangan Terengganu
Siti Nasuha Muhmad: Universiti Teknologi MARA Cawangan Terengganu
Najihah Marha Yaacob: Universiti Teknologi MARA Cawangan Terengganu
Siti Nurhazwani Kamarudin: Universiti Teknologi MARA Cawangan Terengganu
Norfadzilah Rashid: Universiti Sultan Zainal Abidin, Faculty of Business and Management
Mustapha Jamiu: Federal College of Education (Technical), Accounting Education Department

A chapter in Proceedings of the 9th Terengganu International Business and Economics Conference 2025 (TiBEC IX 2025), 2025, pp 128-139 from Springer

Abstract: Abstract This study examines the level of effective tax rates (ETR) among listed companies in Malaysia, focusing on industry-specific variations from 2016 to 2021. Using a dataset of seven industries, trends and differences in ETR are identified to determine which industry has the highest and which has the lowest tax efficiency. In addition, the study analyses the relationship between the ETR and the statutory tax rate (STR) using a paired-samples t-test to identify significant discrepancies. A one-way ANOVA is conducted to determine if there are significant differences in ETR across industries. The results provide insight into the tax planning practices of companies and highlight the differences in tax strategies across industries. These findings are relevant for policy makers, corporate managers and investors as they show the tax efficiency and compliance behaviour of Malaysian listed companies over time across different industries. Given the strategic importance of taxation, understanding these differences is crucial for policy makers, investors and corporate managers.

Keywords: Effective tax rate; tax planning; statutory tax rate; agency theory; tax planning theory (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-801-1_10

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DOI: 10.2991/978-94-6463-801-1_10

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