55 Pages Posted: 22 Dec 2016 Last revised: 23 Apr 2017
Date Written: April 20, 2017
We investigate the effect of public disclosure of information from corporate tax returns filed in Australia on consumers, investors, and the corporations themselves that were subject to disclosure. Supporters of more disclosure argue that increased transparency will improve tax compliance, while opponents argue that it will divulge sensitive information that is, in many cases, misunderstood. Our results show that large private companies are likely to experience consumer backlash and are also, perhaps as a consequence, more likely to act to avoid disclosure. We also fail to detect any material increase in tax payments, one objective of legislating the disclosure regime. Finally, we find that investors react negatively to anticipated and actual disclosure of tax information, most likely due to anticipated policy backlash than the revelation of negative tax information. These findings are important for both managers and policymakers as the trend towards increased tax disclosure continues to rise globally.
Keywords: disclosure, tax disclosure, tax avoidance, corporate governance, privacy, public shaming, surveys
JEL Classification: G38, H25, H26, K34, M41, M48
Suggested Citation: Suggested Citation
Hoopes, Jeffrey L. and Robinson, Leslie A. and Slemrod, Joel B., Public Tax-Return Disclosure (April 20, 2017). Tuck School of Business Working Paper No. 2888385. Available at SSRN: https://ssrn.com/abstract=2888385 or http://dx.doi.org/10.2139/ssrn.2888385