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Corporate Tax Avoidance Incentives of Banks in Ghana

Corporate Tax Avoidance Incentives of Banks in Ghana This study built on the tax avoidance literature in at least two main strands: 1) applying the tax avoidance theories and hypothesis to financial institutions which have been neglected in the empirical literature; and 2) assessing the possibility of tax avoidance persistence among banks, from a developing country perspective. Data from 18 commercial banks in Ghana from 2010 to 2014 were analyzed using systems generalized method of moments estimation technique. The study concluded that while the presence of non-executive directors on boards, aging banks, and liquidity condition motivate banks to engage in tax avoidance schemes, big banks and banks at their latter stages in their lifecycle are discouraged from undertaking tax avoidance activities. Thus, tax avoidance activities exist in financial institutions just like non-financial firms but no evidence exists to support the assertion that tax avoidance schemes persist among banks. Managers of financial institutions must take advantage of existing tax avoidance opportunities by designing appropriate policies that factor in relevant firm-level characteristics. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal Of African Business Taylor & Francis

Corporate Tax Avoidance Incentives of Banks in Ghana

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Corporate Tax Avoidance Incentives of Banks in Ghana

Abstract

This study built on the tax avoidance literature in at least two main strands: 1) applying the tax avoidance theories and hypothesis to financial institutions which have been neglected in the empirical literature; and 2) assessing the possibility of tax avoidance persistence among banks, from a developing country perspective. Data from 18 commercial banks in Ghana from 2010 to 2014 were analyzed using systems generalized method of moments estimation technique. The study concluded that while...
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Publisher
Taylor & Francis
Copyright
© 2019 Informa UK Limited, trading as Taylor & Francis Group
ISSN
1522-9076
eISSN
1522-8916
DOI
10.1080/15228916.2019.1695183
Publisher site
See Article on Publisher Site

Abstract

This study built on the tax avoidance literature in at least two main strands: 1) applying the tax avoidance theories and hypothesis to financial institutions which have been neglected in the empirical literature; and 2) assessing the possibility of tax avoidance persistence among banks, from a developing country perspective. Data from 18 commercial banks in Ghana from 2010 to 2014 were analyzed using systems generalized method of moments estimation technique. The study concluded that while the presence of non-executive directors on boards, aging banks, and liquidity condition motivate banks to engage in tax avoidance schemes, big banks and banks at their latter stages in their lifecycle are discouraged from undertaking tax avoidance activities. Thus, tax avoidance activities exist in financial institutions just like non-financial firms but no evidence exists to support the assertion that tax avoidance schemes persist among banks. Managers of financial institutions must take advantage of existing tax avoidance opportunities by designing appropriate policies that factor in relevant firm-level characteristics.

Journal

Journal Of African Business – Taylor & Francis

Published: Oct 1, 2020

Keywords: Tax avoidance; corporate governance; banks; Ghana

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