How does human capital in the public sector affect tax uncertainty?

Weiyi  Hou; Kunpeng  Sun

doi:10.18282/hrms.v6i2.3486

Weiyi Hou School of Public Finance and Taxation, Central University of Finance and Economics, Beijing 100081, China
Kunpeng Sun School of Public Finance and Taxation, Central University of Finance and Economics, Beijing 100081, China

Article ID: 3486

66 Views

DOI: https://doi.org/10.18282/hrms.v6i2.3486

Keywords: human capital; tax uncertainty; corporate governance; tax inspectors

Abstract

This paper provides new evidence on human resources management within the public sector. We explore the impact and mechanisms of the education and skills of tax inspectors on tax uncertainty using data from A-share-listed companies from 2009 to 2016. Our findings show that tax uncertainty is negatively correlated with the increase in human capital in the tax inspection bureau. That is, tax inspectors with higher levels of education and those who are certified tax agents help reduce tax uncertainty. Further analysis demonstrates that the impact of tax inspectors on tax uncertainty is most pronounced within large-scale and long-established firms.

References

Dryeng, S., Hanlon, M., & Maydew, E. (2008). Long-run corporate tax avoidance. The Accounting Review, 83(1), 61–82.

Dyreng, S., Hanlon, M., & Maydew, E. (2010). The effects of executives on corporate tax avoidance. The Accounting Review, 85(4), 1163–1189.

Guenther, David, A., Wilson, R. J., et al. (2019). Tax uncertainty and incremental tax avoidance. The Accounting Review, 94(2), 229–247.

Hanlon, M., Maydew, E. L., & Saavedra, D. (2017). The taxman cometh: Does tax uncertainty affect corporate cash holdings? Review of Accounting Studies, 22, 1198–1228.

Jacob, M., Wentland, K., & Wentland, S. A. (2022). Real effects of tax uncertainty: Evidence from firm capital investments. Management Science, 68(6), 4065–4089.

McGuire, S. T., Neuman, S. S., & Omer, T. C. (2013). Sustainable tax strategies and earnings persistence. Available online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1950378 (accessed on 29 January 2024).

Petersen, M. A. (2009). Estimating standard errors in finance panel data sets: Comparing approaches. Review of Financial Studies, 22, 435–480.

Rogger, D., & Somani, R. (2023). Hierarchy and Information. Journal of Public Economics, 219, 104823.