Empirical Evidence from Pakistan's Emerging Economy on the Relationship Between Corporate Diversification and Tax Avoidance

Abstract

Businesses utilize tax avoidance methods to avoid paying taxes and boost their after-tax income. In the scientific literature, tax evasion has recently become a focus of discussion. Taxes are an important part of the budget and revenue of developing countries like Pakistan. Because of this, goal of this study is to see how business diversity affects tax avoidance by companies listed on Stock exchange of Pakistan. For sample selection research, utilize twenty-two separate industries to choose 129industries based upon data usage. On an annual basis, study's temporal horizon is 13 years, commencing in 2006 and concluding in 2018. Research utilize GAAPETR to quantify tax evasion in addition to entropy-index use for corporate diversification.