Research On The Impact Of Industry Deviation On Corporate Tax Avoidance

Tax avoidance is a universal phenomenon in the world,especially the problem of corporate tax avoidance,which has been the focus of attention of domestic and foreign tax authorities.The existence of tax avoidance makes some income which should belong to the government retained in enterprises.As a result,the tax cost of enterprises is reduced and the profit after tax is increased on the one hand,and on the other hand,the fiscal revenue of governments is reduced,the fair competition in market is destroyed,the effectiveness of macroeconomic control and resource allocation is also reduced.The traditional view is that corporate tax avoidance is a means of transferring wealth from the state to the owner of enterprises.Therefore,corporate tax avoidance can reduce tax cost and increase enterprise value.However,the recent research on corporate tax avoidance from the perspective of principal-agent theory has indicated that,tax avoidance does not necessarily enhance the value of enterprises.Complex transactions by enterprises for tax avoidance will cover the self-interest behavior of management layer,and further exacerbate agency conflicts and information asymmetry,which will not only reduce the enterprise investment efficiency and distort the allocation of resources,but also increase the risk of price collapse.Taking the negative effects of corporate tax avoidance into account,this paper firstly analyzes the current situation of domestic and foreign corporate tax avoidance from the realistic point of view.Secondly,following relevant economic theories,combined industry deviation with market competition,this paper study the impact of industry deviation and market competition on tax avoidance,and puts forward three hypotheses as follows:(1)The greater the degree of industry deviation,the more enterprises evade tax;(2)The greater the degree of market competition,the more enterprises evade tax;(3)Market competition will weaken the influence of industry deviation on corporate tax avoidance.Again,on the basis of theoretical analysis,according to the domestic and foreign scholars' study about the impact factors of corporate tax avoidance,using empirical data of 2007-2015 China listed companies,we analyzed the influence of industry deviation and market competition on corporate tax avoidance empirically.As expected,the hypotheses mentioned above are tested.The results of the empirical test proved there hypotheses,that the higher the degree of industry deviation and market competition,the more enterprises evade tax,and increasing market competition will weaken the impact of industry deviation on corporate tax avoidance.Which means that,where market competition is more intense,the impact of industry deviation on corporate tax avoidance is more small.Finally,by summarizing,analyzing and comparing the theoretical and empirical results,we draw some conclusions and puts forward some suggestions on how to improve China's tax regulation and defend corporate tax avoidance.