Monetary Policy, The Enterprise Growth And Tax Planning

Monetary policy is one of the government macroeconomic control, will no doubt affect all aspects of the enterprise. When government tighten monetary policy, social capital becomes shortage, enterprises have difficulty in financing from banks and other financial institutions, so enterprises need to find more financing channels at this time. Tax planning can reduce the cash expenditure of the enterprise and increase the enterprise retained funds. When the enterprise is unable to repay debts or unable to meet the necessary funding to sustain the normal development and investment, the enterprise could do some tax planning.Based on the above consideration, this article study the effect of monetary policy to the enterprise behavior of tax planning, the main transmission mechanism is that monetary policy affect the enterprise financing situation, and thus stimulate the enterprise tax planning. This article also add an enterprise characteristics called enterprises’growth ability, because different growth enterprises have different behavior of tax planning in monetary policy tightening phase. Because the high growth companies have more investment opportunities, and the lack of net cash flow and unstable income make these enterprises have to find more external financing to make up the insufficient fund, so high growth companies in financing difficult circumstances may have stronger tax planning motive in the tight monetary policy.This article selects all the data of a-share listed companies as the sample from 2008 to 2014 to empirically research the correlation between monetary policy and tax planning behavior. The study finds that enterprises’tax radical degree is higher during the tight monetary policy, and enterprises with high growth especially have stronger motive in tax planning. At the same time, this paper further grouping studies the different nature of property rights and ownership concentration of enterprises’tax planning behavior during the period of tight monetary policy. The results show that the state-owned enterprises and non-state-owned enterprises both have strong tax planning behavior, and high growth of the state-owned enterprises and non-state-owned enterprises will show higher taxes radical degree during the period of tight monetary policy. Lower ownership concentration and higher ownership concentration both are willing to conduct tax planning in the tight monetary policy, and the higher ownership concentration is, the higher the degree of tax planning can be. And high growth enterprises under different ownership concentration both have strong tax planning motive in the tight monetary policy, which shows the correlation between monetary policy and tax radical degree of conclusion is not affected by the influence of enterprise property rights and ownership concentration.Based on the above research conclusion, this paper puts forward some suggestions to relevant people. First of all, the enterprise should make accounting staffs train on a regular basis so that they can improve their level of morality and accounting skills, and can effectively utilize tax preferential policies to help enterprise to save tax cost. Second, tax regulators should step up supervision and publicity of laws and regulations to improve the consciousness of enterprises about paying taxes according to law. Finally, this paper still has the insufficiency, such as the tax planning cost may be different in the different periods of the macroeconomic, so researchers could continue in-depth study. In addition, future research can also consider other differences of macroeconomic policy’s impact on corporate behavior.