Political influences and effective tax rates: Evidence from Pakistan.

Abstract

The purpose of this document is to examine the relationship between political influences and effective tax rates. This study examines whether companies with political influence pay significantly lower effective taxes than Pakistani companies. The study used a sample of companies that are not listed on the stock exchange in Pakistan during the 2009-2013 period. The results predicted that companies with political influence pay significantly lower effective taxes compared to companies without political influence. This study contributes to the field of political economy theory in which it provides a deep perspective to policy makers interested in improving transparency in transnational economies.