A new tax law aimed at encouraging the reforestation of cleared land in order to increase the amount of forested land in a particular region offers lumber companies tax incentives for each unit of cleared land they reforest. One lumber company has accordingly reduced its tax liability by purchasing a large tract of cleared land in the region and reforesting it. The company paid for the purchase by clearing a larger tract of land in the region, a tract that it had planned to hold in long-term reserve.
The statement 'It can provide a motivation for companies to act in a manner contrary to the purpose of the law while taking advantage of the tax incentives' must be true about the new tax law if the statements above are true.