Corporate Disclosure Quality and Tax Noncompliance

The impact of corporate disclosure quality on macroeconomic issues, including tax noncompliance, is so important to know. According to the growing importance of tax as one of the governmental major financial resources and revenues, it is very important to identify strategies for decrease of tax noncompliance which reduces tax revenues. High quality disclosure of information can be viewed as a regulatory factor that controls the behavior of corporate management and reduces incentives for tax noncompliance, so it is expected that enhancement of corporate disclosure quality will reduce the corporate tax noncompliance. This study, using Panel Data Analysis, examines the impact of corporate disclosure quality on reducing tax noncompliance in Iran. To achieve this, we investigated 40 firms listed in TSE for a period from 2007 to 2011. This study uses timeliness and reliability as two different criteria of disclosure quality and uses a criterion based on the difference between decided and declared tax for measuring tax noncompliance. The results indicate a positive effect of corporate disclosure quality on corporate tax noncompliance reductio.