Comparative Analysis: Impact of Tax Compliance Act on Firms

This essay provides a comparative analysis of two studies focusing on the impact of a mandatory tax compliance act in Australia on corporate tax aggressiveness. The studies are compared based on their research objectives, literature review and theoretical framework, sample description, research design, and findings and conclusions. Both studies generally evaluate how the introduction of the tax compliance act impacts tax aggressiveness. Zummo et al. (2017) conducted an explanatory case study using existing data, while Lanis & Richardson (2012) used the legitimacy theory in an empirical study. Both studies found that the introduction of the tax compliance act significantly impacted tax information disclosure, with more companies willing to disclose tax information as part of being socially responsible.

Similarities and Differences between the two studies
Introduction
• This section investigates the similarities and differences between the two studies.
• The comparison is based on;
 Research objectives
 Literature review and theoretical framework
 Sample description
 Research design
 Findings and Conclusion
Research objectives (the topic of study)
• Generally, both studies focus on evaluating how the introduction of a mandatory tax compliance Act in Australia is likely to impact tax
aggressiveness practice by corporates.
• The study by Zummo et al., (2017), is an explanatory case study that analyze the existing data before and after the introduction of tax
compliance law.
• The study by Lanis & Richardson (2012), is an empirical study used the legitimacy theory to investigate how tax aggressive and non-tax
aggressive corporations reacted to corporate social responsibility (CSR) disclosure.

Literature review and theoretical framework
• The reviewed literature showed that most companies apply tax aggressiveness as a mechanism to avoid paying their fair tax share.
• Under Zummo, et al. (2017), the review showed that the introduction of tax compliance laws in other G20 countries has significantly
increased the disclosure of tax information and reduced tax aggressiveness practices.
• Under Lanis & Richardson (2012), the review showed that corporations should act within the societal norms and bounds.
• Zummo, et al. (2017), was based on the impression management theory while Lanis & Richardson (2012), was based on the legitimacy
theory.
Sample description
• Zummo, et al. (2017), examined the existing data from the S&P/ASX 200 index listed companies during pre-and post tax compliance Act
2013. On the other hand, Lanis & Richardson (2012), had a sample size of 40 (20 tax aggressive companies and 20 non-tax aggressive
companies).
Research design
• Both studies applied statistical techniques such as t-tests and t-statistical for data analysis.
• Lanis & Richardson (2012), used additional techniques like Pearson correlation, OLS regression and Paired sample statistical for
comprehensive analysis.
• Zummo, et al. (2017), relied on secondary data while Lanis & Richardson (2012), used primary data.
Findings and Conclusion
• Generally, the studies found out that the introduction of tax compliance Act had a significant impact of tax information disclosure.
• More companies were willing to disclose tax information as part of being socially responsible.