IDEAS home Printed from https://ideas.repec.org/a/rbs/ijbrss/v10y2021i5p01-10.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/1295/946
    Download Restriction: no

    File URL: https://doi.org/10.20525/ijrbs.v10i5.1295
    Download Restriction: no

    File URL: https://libkey.io/10.20525/ijrbs.v10i5.1295?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gordon,Roger & Sarada,, 2019. "The Role of the Corporate Tax," Cambridge Books, Cambridge University Press, number 9781108747998, September.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. De Obesso Arias, María de las Mercedes & Pérez Rivero, Carlos Alberto & Carrero Márquez, Oliver, 2023. "Artificial intelligence to manage workplace bullying," Journal of Business Research, Elsevier, vol. 160(C).
    2. Kadarisman Hidayat & Diana Zuhroh, 2023. "The Impact of Environmental, Social and Governance, Sustainable Financial Performance, Ownership Structure, and Composition of Company Directors on Tax Avoidance: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 311-320, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aimee Peta Waterson & Lebogang Mototo & Tinashe Chuchu, 2021. "Does online ideal self-matter? Consumer perceptions of online brand advertisement," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(5), pages 11-21, July.
    2. Eva López‐González & Jennifer Martínez‐Ferrero & Emma García‐Meca, 2019. "Does corporate social responsibility affect tax avoidance: Evidence from family firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 819-831, July.
    3. Kovermann, Jost & Velte, Patrick, 2019. "The impact of corporate governance on corporate tax avoidance—A literature review," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 36(C), pages 1-1.
    4. Ferchichi Jihene & Dabboussi Moez, 2019. "The Moderating Effect of Audit Quality on CEO Compensation and Tax Avoidance: Evidence from Tunisian Context," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 131-139.
    5. Benkraiem, Ramzi & Uyar, Ali & Kilic, Merve & Schneider, Friedrich, 2021. "Ethical behavior, auditing strength, and tax evasion: A worldwide perspective," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 43(C).
    6. Hong Nguyen Thi Phuong & Thao Nguyen Thi Vo, 2021. "Impacts of Sales Expense and Administrative Cost Stickiness on Earnings Management – Empirical Evidence from Vietnam," Management, Sciendo, vol. 25(2), pages 206-231, December.
    7. Helmi A. Boshnak, 2021. "The Impact of Audit Committee Characteristics on Audit Quality: Evidence from Saudi Arabia," International Review of Management and Marketing, Econjournals, vol. 11(4), pages 1-12.
    8. Kovermann, Jost & Wendt, Martin, 2019. "Tax avoidance in family firms: Evidence from large private firms," Journal of Contemporary Accounting and Economics, Elsevier, vol. 15(2), pages 145-157.
    9. Samara, Georges, 2021. "Family businesses in the Arab Middle East: What do we know and where should we go?," Journal of Family Business Strategy, Elsevier, vol. 12(3).
    10. Omid Mehri Namakavarani & Abbas Ali Daryaei & Davood Askarany & Saeed Askary, 2021. "Audit Committee Characteristics and Quality of Financial Information: The Role of the Internal Information Environment and Political Connections," JRFM, MDPI, vol. 14(6), pages 1-18, June.
    11. Joni, Joni & Ahmed, Kamran & Hamilton, Jane, 2020. "Politically connected boards, family and business group affiliations, and cost of capital: Evidence from Indonesia," The British Accounting Review, Elsevier, vol. 52(3).
    12. Zhang, Huiming & Huang, Jiying & Wu, Kai & Wang, Shouyang & Nygaard, Christian & Qiu, Yueming, 2022. "Do political connections affect corporate poverty alleviation decisions? Evidence from China," China Economic Review, Elsevier, vol. 73(C).
    13. Hoepner, Andreas G.F. & Lin, Ming-Tsung, 2022. "Do shareholder views affect corporate political activities?," International Review of Financial Analysis, Elsevier, vol. 84(C).
    14. Dongmin Kong & Junyi Xiang & Jian Zhang & Yiyang Lu, 2019. "Politically connected independent directors and corporate fraud in China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 58(5), pages 1347-1383, March.
    15. Trifonov, Dmitri, 2021. "Political connections of Russian corporations: Blessing or curse?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    16. Markus Hesse & Michael Rafferty, 2020. "Relational Cities Disrupted: Reflections on the Particular Geographies of COVID‐19 For Small But Global Urbanisation in Dublin, Ireland, and Luxembourg City, Luxembourg," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 451-464, July.
    17. Antonio Faúndez-Ugalde & Patricia Toledo-Zúñiga & Pedro Castro-Rodríguez, 2022. "Tax Sustainability: Tax Transparency in Latin America and the Chilean Case," Sustainability, MDPI, vol. 14(4), pages 1-17, February.
    18. Tânia Menezes Montenegro, 2021. "Tax Evasion, Corporate Social Responsibility and National Governance: A Country-Level Study," Sustainability, MDPI, vol. 13(20), pages 1-19, October.
    19. Sigler, Thomas & Neal, Zachary & Martinus, Kirsten, 2020. "The Brokerage Roles of City-Regions in Global Corporate Networks," OSF Preprints nvs79, Center for Open Science.
    20. Kirsten Martinus & Thomas Sigler & Iacopo Iacopini & Ben Derudder, 2021. "The brokerage role of small states and territories in global corporate networks," Growth and Change, Wiley Blackwell, vol. 52(1), pages 12-28, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijbrss:v:10:y:2021:i:5:p:01-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Umit Hacioglu (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.