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The purpose of this study is to examine the impact of tax planning (TP), which measured by the component of tax saving (TS), namely, permanent differences (PDs), temporary differences (TDF), foreign tax rates (FTRs) differentials and tax losses (TLOS) on tax disclosure (TD).

This study uses panel data set from sample consisted of 286 non-financial listed companies in the main market of Bursa Malaysia (formerly known as Kuala Lumpur stock exchange) for three years 2010-2012. The empirical understanding of TD depends on publicly source of data in the financial statement, characterized in the aggregated note of tax expenses. TD was measured using modified effective tax rate reconciling items, as it is appropriate in the Malaysian environment. The paper uses multivariate statistical analyses on this sample.

The empirical results of the multivariate regressions indicated that TD exhibits significant positive association with the TLOS component of TS but has significant negative relationship related to the PDs component of TS and TDFs component of TS.

This study extends the prior-related literature by examining the relation between TD and component of TS. This study depends on both the signaling theory and the Scholes–Wolfson framework. These are the main theories concerned with TD and TP (TSs), respectively. Therefore, from a theoretical side, the authors adds to the current theories by verifying that users are the party influenced whether positively or negatively, by the extent of TD or the extent of activities of TP through Malaysian organizations.

The evidence found by this study has important policy and practical knowledge implications for a minimum of three parties, namely, authorities, researchers in academic field and decision-makers and firm managers. The findings can provide them some relevant insights on the importance of TS actions from companies’ perspective and contribute to the discussion of who verifies and deduces from TD directed by companies.

This study is regarded as the first attempt to examine the impact of the component of TS, namely: PDs, TDFs, FTRs differentials and TLOS on TD in a developing nation such as Malaysia. In spite of this paper focuses on a single country, it contributes significant insights to the debate about TD.

This paper aims to examine the impact of corporate tax planning (TP) on tax disclosure (TD). Using tax expenses data set, with the detailed effective tax rate (ETR) by reconciling individual items of income and expenses.

A firm-level panel data set is used to analyse 286 non-financial listed companies on Bursa Malaysia that spans the period 2010-2012. Multivariate statistical analyses were run on the sample data. The empirical understanding of TD depends on public sources of data in the financial statement, characterized in the aggregated note of tax expenses. Fitting with Malaysian environment, the authors measured TD using modified ETR reconciling items.

Results show that TP, exhibit a robust positive influence on TD. This suggests that TP is related to lower corporate TD. In addition, companies with high TP attempt to mitigate the disclosure problem by increasing various TD. The authors further find significant positive impact between each of firm size and industry dummy, on TD. This means that company-specific characteristics are significant factors affecting corporate TD.

This study contributes to the literature on the effect of TP on TD. It depends on both the signalling theory and the Scholes–Wolfson framework, which are the main theories concerned with TP and TD. Therefore, from a theoretical side, the authors add to the current theories by verifying that users are the party influenced whether positively or negatively, by the extent of TD or the extent of TP activities through Malaysian organizations.

The evidence found in this paper has important policy and practical implications for the authorities, researchers, decision makers and company managers. The findings can provide them some relevant insights on the importance of TP actions from companies’ perspective and contribute to the discussion of who verifies and deduces from TD directed by companies.

This paper originality is regarded as the first attempt to examine the impact of TP on TD in a developing country such as Malaysia. Malaysian setting is an interesting one to examine because Malaysia could be similar to other countries in Southeast Asia. Results contribute significant insights to the discussion about TD regarding, which parties are responsible for the verification of TD by firms, and which parties benefit from this disclosure. Findings suggest that companies face a trade-off between tax benefits and TD when selecting the type of their TP.

The fundamental problem of designing a wide scope general revenue tax can be reduced to the selection of the base used for administering the tax. Our current personal income tax is a hybrid version of a tax assessed on the basis of a tax unit's annual income receipts. An alternative to an income‐based tax that has received much theoretical treatment but little actual application is an expenditure‐based tax. An expenditure tax (also called a consumption tax or cash flow tax in the context of this paper) differs from an income tax in that it exempts net saving and investment from the tax base. Though the details of a consumption tax design are discussed more fully elsewhere in this paper, the tax base of an expenditure tax is roughly determined by subtracting net savings from gross receipts (including wages, tips, salaries, income from investments, interests, etc.). Withdrawals from savings constitute dissavings and are appropriately included in net savings. The cash flow tax, with wealth transfers deductible to the donor and included in the tax base of the recipient, would be a tax on an individual's standard of living. Similar to the present income tax standard deduction, some universal credit or exemption for a small level of consumption could be allowed.

Despite the almost universal belief to the contrary, inventory reduction should not be a major objective for investing in advanced manufacturing technology because the financial benefits from it can be relatively small compared with other benefits. This article describes how changes in inventory are valued and why inventory reductions can have a complex, and often negative, effect on profitability. High inventory levels are only a symptom of other problems; if these problems are not first identified and solved, inventory reductions can be counterproductive.

The purpose of this paper is to study the role of public and private imbalances in the cyclicality of the current account balance in a sample of advanced and developing countries. Within developing countries, the evidence does not establish the dependency of private investment on private savings and private consumption is the main driver of the saving/investment balance. In contrast, private savings seem to be better mobilized to finance private investment and the latter is the main driver of the saving/investment balance in advanced countries. Deterioration in the current account balance in response to higher private consumption could be detrimental to growth and external stability. In contrast, an investment strategy that promotes growth is likely to attract financial flows and reduce the risk of a widening current account deficit on external stability.

The paper studies determinants of the current account deficit. It studies current account fluctuations in the short‐run and explains these fluctuations by analyzing movements in the underlying components: public and private savings as well as investments and resulting imbalances. Of particular interest is the interaction between the government budget deficit, the private saving/investment balance, and the current account balance.

Using time‐series estimates, co‐movements indicate that fluctuations in the current account balance in many advanced countries appear to be driven by private investment that determines cyclicality in imports. In contrast, cyclicality in the current account appears to be driven by private consumption that determines fluctuations in imports in many developing countries. In general, fluctuations in the government budget deficit are mostly driven by government investment and fluctuations in the private saving/investment balance are mostly driven by fluctuations in private investment. Further, fluctuations in the current account balance appear to be mostly driven by fluctuations in the private saving/investment balance.

The paper explains the dynamics of the current account in relation to developments in public and private imbalances and its underlying components. It shows the effects of changes in the budget deficit and its underlying components on cyclicality in the current account. Similarly, cyclicality in the current account balance with cyclical movements in private savings and investment is studied, along with which factors affect the components of the current account balance. In particular, the paper establishes which components of the current account significantly respond to the cyclical changes in macroeconomic variables.

This study aims to provide a comprehensive analysis on the reasons of the observed trend in the GAAP ETR over 1960–2016.

The authors use a linear tax function which allows for time-varying coefficients to track the trend in GAAP ETR over 1960–2016. This approach can decompose the ETR trend into the trends of the statutory tax rate, the propensity to recognize taxes, the tax-related firm characteristics and their coefficients. Thus, the authors can quantify the contribution of each factor in the tax function to the ETR trend.

Before 1988, the declining trend in tax expense is mainly driven by changes in the statutory tax rate; in contrast, after 1988, the trend is completely explained by firms’ decreasing propensity to recognize tax expense. While prevalent across different groups of firms, the decreasing propensity to recognize tax expense in the recent 30 years is more pronounced among firms that have higher needs for tax savings or greater tax-saving advantages.

To the best of the authors’ knowledge, this study is the first one that uses a trend analysis to examine the reasons for the downward trend in tax expense over a long period (1960–2016). The results show that, although the trend appears for the full sample period, it is driven by different forces between the first and second half of the time window. A decreasing propensity to recognize tax expense is the main reason for only the trend in recent years, which calls for attention from academia and policymakers. The results also show which firms have had faster trends in their propensity to recognize tax expense, suggesting targets for tax enforcement and tax researchers.

This research explores the expectation gap between tax clients’ motivations to hire tax preparers versus tax preparers’ perceptions of those client motivations. The study builds on limited previous research by examining preparers primarily from local firms rather than focusing solely on large international firms. The Gaps Model of Service Quality provides the theoretical lens for the paper. We employ the recently developed Taxpayer Motivation Scale (TMS) to measure four client motivations to hire a preparer: (1) saving money, (2) saving time, (3) legal compliance, and (4) protection from the IRS. We measure expectation gaps for those four motivations using matched tax preparer–tax client dyads.

We employ statistical sub-group analyses to investigate the effects of both clients’ and preparers’ demographic characteristics that influence tax-expectation gaps. Results suggest client gender plays a noteworthy role in predicting many of the gaps. In addition, complexity of tax returns, children in the home, and client perceptions of tax-preparer advocacy help explain gaps. Finally, female preparers appear to be relatively more sensitive to client needs. We conclude that tax preparers need to (1) better understand their clients’ motivations for hiring them and (2) reexamine marketing efforts to educate clients about preparer credentials and potential strategy options for tax preparation.