Analysis of the Effect of Voluntary Disclosure on Tax Evasion: An Applied Study on the Private Shareholding Companies Listed in the Iraq Stock Exchange

Abstract

The present study aims to measure and analyze the impact of voluntary disclosure of private joint-stock companies on tax evasion for the period from 2016 to 2020. To obtain this objective, the researcher relied on a special model to measure voluntary disclosure using the Miller index to measure tax evasion. The present study relied on the inductive approach in its theoretical part and the descriptive analytical approach to reveal the causal relationships and test the hypothesis. The study population includes the General Commission for Taxes. The study sample consists of companies within the private sector, namely (Al-Mamoura Investments Company, Baghdad Hotel, the Iraqi Company for Seed Production, and Elaf Islamic Bank). The present study concludes that there is no influence of voluntary disclosure on tax evasion as well as the discrepancy and difference in voluntary disclosure rates for companies between sectors. There is no specific or close level, which means that each company has its own policy, culture, and awareness of adopting and practicing voluntary disclosure regardless of the sector in which it operates. The Iraqi private shareholding companies practice tax evasion at different rates. The present study recommends activating the supervisory role of the competent authorities, foremost of which is the tax administration represented by the General Authority for Taxes, to reduce the chances and size of manipulation in financial reports and to impose strict and deterrent penalties on those who transgress the tax law and attempt to present misleading financial statements by enacting Numerous court rulings and imposing large fines.