Bewertung des Arabian Journal of Business and Management

Changing Corporate Tax Policy Impacts on the Risk Level of Vietnam Electric Power Firms

Abstract

Dinh Tran Ngoc Huy

This study analyzes the impacts of tax policy on market risk for the listed firms in the electric power industry during and after the period 2007-2009 as the local economy has been affected by the financial crisis. First, by using quantitative and analytical methods to estimate asset and equity beta of total 20 listed companies in Vietnam electric power industry with a proper traditional model, we found out that the beta values, in general, for many companies are acceptable. Second, under 3 different scenarios of changing tax rates (20%, 25% and 28%), we recognized that there is not large disperse in equity beta values, estimated at 0,446, 0,449 and 0,451. These values are much lower than those of the listed VN construction firms. Third, by changing tax rates in 3 scenarios (25%, 20% and 28%), we recognized both equity and asset beta mean values have positive relationship with the increasing levels of tax rate. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.