The Impact of Reduction of Bank Sales Tax:To Discuss Disclosure of Bad Expenses and reaction of stock

• Main Authors: Chun-Han Chaung, 莊淳涵
• Other Authors: Ching-Tzai Wu
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/51639920080411796606

碩士 === 國立成功大學 === 會計學系碩博士班 === 92 === 　　In order to improve domestic financial system and help banking accelerate to eliminate bad debts. There are three important sales tax amendments since 1999. First, the Ministry of finance decreases financial institutions sales tax rate from 5% to 2%. And then, the financial institutions’ sales are free of tax since 2006. Finally, the Ministry of finance extends the period of decreasing financial institutions’ sales tax rate from 5% to 2% from 2003 till 2005.The main purpose of this study are as follow: (1) To examine the effects of government’s policy by observing the disclosure of bad debts. (2)To analyze the fluctuation of stock price in a series of sales tax events. (3)To discuss the reason of abnormal return. 　　First, this study uses the Wahlen’s regression model to estimate discretionary bad expense to investigate the effects of decrease of sales tax. Second, we discuss whether the presence of abnormal return is due to the decrease of sales tax by event study. Based on empirical results, we find that no matter before or after reducing banking sales tax, discretionary bad expenses are overstated. But after decreasing sales tax, the discretionary bad expenses are larger than that before. However, not all of the events result in abnormal return. Actually, the positive abnormal return of stock return exists during the period of sales tax-free, and negative abnormal return exists during the periods of decreasing sales tax from 5% to 2% and canceling tax-free. Furthermore, the negative relation between the negative abnormal return and incremental EPS is found significantly. At the same time, we also find that positive or negative abnormal return both are negatively related to the overdue significantly.