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Tax avoidance in government-owned firms: Evidence from Italy


  • Elisabetta Mafrolla


This paper studies whether and why government-owned firms avoid taxation to a greater extent than wholly privately-owned firms do. By considering a sample of Italian listed corporations for the period between 2006 and 2011, it was found that government ownership had a systematically negative effect on corporate effective tax rate, with a prevalence of tax-planning policies focused on the long term. Managers of local government-owned firms focused on minimizing costs, even if this was to the detriment of national tax-revenue collection.The author investigated tax avoidance in government-owned firms with the surprising finding that government owners avoid taxation to a greater extent than private sector owners. Managers of government-owned firms (and especially local government owners) were found to pursue political goals that focused on cost- minimizing policies, reducing national tax revenue. This paper will be of value to policy- makers, who should consider tax avoidance by government-owned enterprises as a real possibility.

Suggested Citation

  • Elisabetta Mafrolla, 2019. "Tax avoidance in government-owned firms: Evidence from Italy," Public Money & Management, Taylor & Francis Journals, vol. 39(3), pages 186-192, April.
  • Handle: RePEc:taf:pubmmg:v:39:y:2019:i:3:p:186-192
    DOI: 10.1080/09540962.2018.1516955

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    1. Saif-Ur-Rehman & Elgiliani Elshareif & Hashim Khan, 2023. "CEO Greed and Firms' Environmental Performance in Environmentally Sensitive Sectors of China," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 14(1), pages 1-30, January.

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