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The influence factors of tax avoidance in Indonesia

Author

Listed:
  • Rosida Ibrahim

    (Faculty of Economics and Business, University of Brawijaya Jl. MT. Haryono No.165, Malang, Indonesia)

  • Sutrisno T

    (Faculty of Economics and Business, University of Brawijaya Jl. MT. Haryono No.165, Malang, Indonesia)

  • M. Khoiru Rusydi

    (Faculty of Economics and Business, University of Brawijaya Jl. MT. Haryono No.165, Malang, Indonesia)

Abstract

This study aims to analyze the effect of executive characteristics and family ownership as a stimulus factor for tax avoidance and to see the existence of a political relationship as a moderating variable in the effect of executive characteristics and family ownership on tax avoidance. This research was conducted on manufacturing companies listed on the Indonesia Stock Exchange during 2017-2019. In this study, the sample was determined based on the purposive sampling technique with the criteria that the sample company was manufacture listed on the IDX for three consecutive years from 2017-2019, published an annual report in the 2017-2019 period sequentially, did not experience delisting, was not a company the IPO in 2018-2019, did not experience any losses and did not have an ETR value of more than 1. The research sample was obtained from as many as 138 companies with 3 years of observation. This study uses multiple linear regression analysis (Multiple Regression Analysis) and Moderate Regression Analysis (MRA) using the Statistical Product and Service Solution (SPSS) program. The results showed (I) executive characteristics had a significant positive effect on tax avoidance (II) family ownership had a significant negative effect on tax avoidance (III) political connections were not able to strengthen the executive's positive influence on tax avoidance (IV) political connections weakened family ownership on tax avoidance. This study can also show that the sample companies tend to comply with tax rules, they avoid sanctions and fines, and consider the risk of loss that must be faced by the company when proven to do tax avoidance. Key Words:executive characteristic, family ownership, tax avoidance, political connections

Suggested Citation

  • Rosida Ibrahim & Sutrisno T & M. Khoiru Rusydi, 2021. "The influence factors of tax avoidance in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 01-10, July.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:5:p:01-10
    DOI: 10.20525/ijrbs.v10i5.1295
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    References listed on IDEAS

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    1. Safa Gaaya & Nadia Lakhal & Faten Lakhal, 2017. "Does family ownership reduce corporate tax avoidance? The moderating effect of audit quality," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 32(7), pages 731-744, August.
    2. Gordon,Roger & Sarada,, 2019. "The Role of the Corporate Tax," Cambridge Books, Cambridge University Press, number 9781108747998, January.
    3. Faten Lakhal & Safa Gaaya & Nadia Lakhal, 2017. "Does family ownership reduce corporate tax avoidance? The moderating effect of audit quality," Post-Print hal-01686420, HAL.
    4. Safa Gaaya & Nadia Lakhal & Faten Lakhal, 2017. "Does family ownership reduce corporate tax avoidance? The moderating effect of audit quality," Post-Print hal-03562617, HAL.
    5. Wong, Wai-Yan & Hooy, Chee-Wooi, 2018. "Do types of political connection affect firm performance differently?," Pacific-Basin Finance Journal, Elsevier, vol. 51(C), pages 297-317.
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