Tax Collection, Tax Incentives And Corporate Transparency

With the rapid development of market economy in our country, taxpayers who paid more and more attention on tax planning to pursuit the maximum value of corporate. More and more enterprises engaged in various types of tax planning to reduce the tax burden. Although tax planning provides expected tax savings, it can simultaneously increase the financial complexity of the organization. And, to the extent that this greater financial complexity cannot be adequately communicated to outside parties, such as investors and analysts, transparency problems can arise. Poor transparency has been shown to impose an array of costs on firms, such as raising both the debt and equity costs of capital, exacerbating governance problems, and bringing the risk of stock price plummeted. In this paper, through establishing the association between tax aggressiveness, analysts forecast error and earnings quality, we suggests that aggressive tax planning decreases corporate transparency. Joining the tax enforcement mechanism, we suggest that the tax enforcement can weaken the relationship of the tax aggressiveness and corporate transparency. It is important to realize the relationship of the tax aggressiveness and corporate transparency and how to balance this relationship. It also has a certain reference value for the government to strengthen the tax enforcement.Based on the agency theory and asymmetric information theory, we develop the framework of the tax aggressiveness, the tax enforcement and corporate transparency. Through testing the data of China's Shanghai and Shenzhen A shares of listing Corporation during 2011 and 2014. We can find:(1) The greater the tax aggressiveness, the lower corporate information transparency;(2) It is significantly different that the impact of tax aggressiveness on corporate transparency for the different nature of property right of the company;(3) The tax enforcement helps to reduce tax aggressiveness, and play a role in suppressing the management opportunism behavior. It is good to improve the transparency of the company to a certain extent. Based on the above conclusions, this paper puts forward to the relevant policy suggestions from the government and the company.