The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study
The policy of gradual reduction in the corporate tax rate in Malaysia, which commenced since 1988 and continued till today, has become a cause for concern, as the benefits of such reduction have not been established at least empirically. The present study thus investigates the impact of the reductio...
| Main Authors: | , , , , |
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| Format: | Proceeding Paper |
| Language: | English |
| Published: |
Kolej Universiti Islam Selangor (KUIS)
2017
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/60831/ http://irep.iium.edu.my/60831/1/Corporate%20Tax%20Ibn%20Khaldun.pdf |
| _version_ | 1848785557129265152 |
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| author | Annuar, Hairul Azlan Isa, Khadijah Hamdan, Hamdino Salihu, Ibrahim Aramide Solarin, Sakiru Adebola |
| author_facet | Annuar, Hairul Azlan Isa, Khadijah Hamdan, Hamdino Salihu, Ibrahim Aramide Solarin, Sakiru Adebola |
| author_sort | Annuar, Hairul Azlan |
| building | IIUM Repository |
| collection | Online Access |
| description | The policy of gradual reduction in the corporate tax rate in Malaysia, which commenced since 1988 and continued till today, has become a cause for concern, as the benefits of such reduction have not been established at least empirically. The present study thus investigates the impact of the reduction of the corporate tax rate on the corporate tax revenue. The study adopts the theory of taxation by Ibn Khaldun – depicted as laffer curve. The analysis of the time series data for period between 1996 and 2014, using the ARDL approach, shows that the corporate tax rate has a dual effect on the corporate tax revenue over the study period. It shows an inverted U-shape relationship between corporate tax rate and corporate tax revenue and further reveals that the optimal tax rate is 25.5156%. Inferentially, a positive relationship existed between the two variables prior to the optimal tax rate and a negative relationship afterward. A further test of causality also shows a long-run unidirectional causality from corporate tax rate to corporate tax revenue. Thus, the policy of the gradual reduction of the corporate tax rate is suspected to have positive impacts on the productivity of Malaysia companies in term of increase in corporate tax revenue. |
| first_indexed | 2025-11-14T16:55:02Z |
| format | Proceeding Paper |
| id | iium-60831 |
| institution | International Islamic University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T16:55:02Z |
| publishDate | 2017 |
| publisher | Kolej Universiti Islam Selangor (KUIS) |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | iium-608312018-02-04T06:02:27Z http://irep.iium.edu.my/60831/ The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study Annuar, Hairul Azlan Isa, Khadijah Hamdan, Hamdino Salihu, Ibrahim Aramide Solarin, Sakiru Adebola HJ2240 Revenue. Taxation The policy of gradual reduction in the corporate tax rate in Malaysia, which commenced since 1988 and continued till today, has become a cause for concern, as the benefits of such reduction have not been established at least empirically. The present study thus investigates the impact of the reduction of the corporate tax rate on the corporate tax revenue. The study adopts the theory of taxation by Ibn Khaldun – depicted as laffer curve. The analysis of the time series data for period between 1996 and 2014, using the ARDL approach, shows that the corporate tax rate has a dual effect on the corporate tax revenue over the study period. It shows an inverted U-shape relationship between corporate tax rate and corporate tax revenue and further reveals that the optimal tax rate is 25.5156%. Inferentially, a positive relationship existed between the two variables prior to the optimal tax rate and a negative relationship afterward. A further test of causality also shows a long-run unidirectional causality from corporate tax rate to corporate tax revenue. Thus, the policy of the gradual reduction of the corporate tax rate is suspected to have positive impacts on the productivity of Malaysia companies in term of increase in corporate tax revenue. Kolej Universiti Islam Selangor (KUIS) 2017-11-07 Proceeding Paper NonPeerReviewed application/pdf en http://irep.iium.edu.my/60831/1/Corporate%20Tax%20Ibn%20Khaldun.pdf Annuar, Hairul Azlan and Isa, Khadijah and Hamdan, Hamdino and Salihu, Ibrahim Aramide and Solarin, Sakiru Adebola (2017) The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study. In: 4th International Conference on Management and Muamalah 2017 (ICoMM 2017), 7 Nov 2017, Putrajaya, Malaysia. (In Press) |
| spellingShingle | HJ2240 Revenue. Taxation Annuar, Hairul Azlan Isa, Khadijah Hamdan, Hamdino Salihu, Ibrahim Aramide Solarin, Sakiru Adebola The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title | The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title_full | The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title_fullStr | The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title_full_unstemmed | The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title_short | The positive effect of Malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| title_sort | positive effect of malaysia government corporate tax reduction initiative on public listed companies’ revenue: a longitudinal study |
| topic | HJ2240 Revenue. Taxation |
| url | http://irep.iium.edu.my/60831/ http://irep.iium.edu.my/60831/1/Corporate%20Tax%20Ibn%20Khaldun.pdf |