Firm Traits, Corporate Governance and Tax Avoidance: Evidence from Listed Banks in Bangladesh
DOI:
https://doi.org/10.64102/rujssbs.0479Keywords:
Tax Avoidance, Firm traits, Corporate governance, Banking industry of BangladeshAbstract
Tax avoidance is one of the tactics used by firms to reduce their tax burden to the government lawfully. This study strives to determine if corporate governance (CG) and firm attributes significantly influence such tax avoidance attitude of firms. This study looks at a sample of 34 banks listed on the Dhaka Stock Exchange. Profitability, firm size, leverage, and capital intensity are used to describe firm-specific characteristics, whereas board size and board independence are used to quantify corporate governance (CG). The analysis is based on secondary data gathered from the audited annual reports of the selected banks, which cover the period 2014-2023. The study has used a two-step system GMM panel model estimator to estimate its trend. Accordingly, it is evident from the study findings that firm features and CG practices have significantly influenced tax-avoidance practices of the DSE-listed banks. The study found that profitability has a positive effect on tax avoidance, while board size, board independence, and capital intensity have negative impacts on tax avoidance. Based on these findings, the study suggests enhancing corporate governance structures and carefully considering firm traits in order to effectively control and monitor tax avoidance techniques in the banking industry. This study sheds light on corporate tax avoidance, which can inform regulatory reforms and further academic research and learning.
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