A Study On The Impact Of Income Tax Reform On Corporate Behavior And Performance

Against the background of economic globalization, the modern taxation systembecomes more sectionalization and complication. As a part of public revenue,corporate income tax now becomes a bond between government and firm. And it isalso a company supervision method for the government. Therefore, income tax is avery important consideration to influence corporate behavior. Since the new corporateincome tax law put into execution in2008, the business environment has changed andalso effect the management behavior. This paper is based on the tax reform in2008,use listed companies in Henan province as the object to study their behaviors andperformance, and then choose two companies with different ownership properties ascases to show the effects of income tax reform.This paper use37firms listed before January1,2008in Henan as the researchsample, applied descriptive statistic analysis, corresponding analysis and mean valueT-test between those sample. Then we choose Aeolus Holdings and Yutong PassengerTrain Co. as two different cases to analysis these firms’ actual tax, investment andfinancing level, absolute scale of labor employment after income tax reform in2008.The research shows that the average data of actual tax in Henans’ companies hasbeen raised since the tax reform, and the investment level has raised, but thefinancing level has been reduced, also the company performance. On the contrary, thetwo research samples show the result in a different way.The implications of this research is to analysis the tax reforms’ effect about firms’performance and behavior through micro perspective level, that may present evidenceof the achievement of tax policy in China. Hopefully, can help the government ofHenan province find out the main point of supervision, hereby can give the listedfirms more service and suggestions. Meanwhile to provide a more Scientific view andmore idea in the design of taxation system and company operation.