Abstract:
The significance of informative, decision-useful information is emphasized through presentation and disclosure. Descriptive disclosures can facilitate users to gain a better comprehension of the reporting entity in order to make enhanced investment decisions. Users of financial and non-financial reporting depend to a great extent on the reported information of companies. Therefore, it is imperative to assess the reported information of companies to ascertain whether this information is adequate and useful. This study focuses on the reporting of tax related matters of listed companies in South Africa. Tax reporting is divided into two broad categories, namely: mandatory tax reporting and voluntary tax reporting. A combined tax reporting approach, which consists of a combination of mandatory and voluntary tax reporting, can be described as excellent reporting.
Mandatory tax reporting is compulsory for all listed companies in South Africa. The evaluation of mandatory tax reporting in this study was based on the requirements of the International Financial Reporting Standards (IFRS). Voluntary tax reporting is not compulsory, but rather founded on a comply or explain approach. The International Integrated Reporting Council (IIRC) and Global initiatives are the foundation on which voluntary tax reporting is established. Although one would hope that increased pressure to improve the transparency in tax reporting would facilitate tax compliance from companies, decoupling, as part of institutional theory, demonstrates that there is a gap between formal policies and actual organizational practices.
