Tax Planning Practices Amongst Tax Agents: Evidence from Malaysia

Abstract

This study explored the complexity of corporate tax planning practised by the
tax agents. In Malaysia, studies on tax investigations were limited due to the high
information privacy factors. This study aimed to reveal the tax planning strategies through
frequent adjustments made by the companies helped by the tax agents. Tax management
itself is a way to properly meet the tax obligations, but the paid amount of tax can be
reduced to obtain the expected profits. Tax planning leads and attracts more public
attentions. A survey among 106 tax agents in Malaysia working in big-four companies
revealed that tax planning appeared to be significant suggested by the tax agents as the
companies had limited knowledge on tax regulations and law. This study also found an
interesting finding in which companies heavily relied on the tax agents in minimising their
yearly tax incidence although the tax planning might violate the current tax laws. This
study recommends that the essential elements of designing a good tax system will help
restrict the conditions which enable the tax evasion for the future development. This study
considered the theoretical developments and related empirical findings on the interrelated
issues to measure the tax planning and possible causes and results of corporate tax
evasion. This study presented some ideas for further research to examine the unexplained
topics on tax planning. In addition, the research findings also signaled to the policy
makers to focus more on the integrity of tax agents to increase the compliance.