Can tax authorities identify aggressive tax avoidance of companies? Empirical evidence based on private listed companies

Abstract

The taxpaying credit system is an indispensable link in the construction of the national credit system and an important practice of innovating social governance and improving governance efficiency. Based on the taxpaying credit rating data obtained from the website of the State Taxation Administration, this paper empirically tested the relationship between the degree of corporate tax avoidance and the taxpaying credit rating. The study found that the more aggressive the tax avoidance behavior of private enterprises was, the higher the probability of being rated as low taxpaying credit would become. Fiscal pressures and political connections could weaken the relationship. Further research found that media attention and analysts’ concern could effectively monitor the tax avoidance behavior of politically connected companies. The research conclusions of this paper have certain reference value for improving the tax governance capability.