Article Sidebar

Download
PDF
Statistic
Read Counter : 718 Download : 1077

Main Article Content

Abstract

Indonesia's low tax ratio compared to other Asia-Pacific nations may indicate the presence of tax avoidance. The Tax Justice Network has revealed that corporations are the primary culprits of tax avoidance in Indonesia, with mining companies being among the examples of such practices that have been exposed. Related to this phenomenon, this study seeks to acquire factual evidence on how financial distress, thin capitalization and the disclosure of corporate social responsibility affect the tax avoidance among mining firms publicly listed on the IDX during the period of 2019 to 2021. By utilizing purposive sampling technique, this study successfully selected 18 companies, generating a total of 54 observational data that were used for analysis. To obtain the required data, this study relied on secondary sources such as audited financial statements, annual reports and/or sustainable reports. The main approach employed for analyzing the data and testing hypotheses in this study was multiple linear regression analysis. The findings of the study demonstrate that financial distress has a significant negative impact on tax avoidance. However, the study did not find statistically significant evidence to support the impact of thin capitalization and corporate social responsibility disclosure on tax avoidance.

Keywords

Corporate Social Responsibility Financial Distress Tax Avoidance Thin Capitalization

Article Details

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Tandayu, B., Kalangi, L., & Tangkuman, S. J. (2023). The Uncovering Tax Avoidance Drivers in IDX Mining Firms 2019-2021: Financial Distress, Thin Capitalization, and CSR Disclosure Effects. Ilomata International Journal of Tax and Accounting, 4(2), 221-235. https://doi.org/10.52728/ijtc.v4i2.710

References

  1. Ahdiyah, A., & Triyanto, D. N. (2021). Impact of Financial Distress, Firm Size, Fixed Asset Intensity, and Inventory Intensity on Tax Aggressiveness. Journal of Accounting Auditing and Business, 4(2), 49–59. https://jurnal.unpad.ac.id/jaab/article/view/34528
  2. Alhady, I., Arieftiara, D., & Lastiningsih, N. (2021). Does board of commissioners independence still relevant in tax avoidance monitoring? International Journal of Research in Business and Social Science, 10(5), 148–156. https://doi.org/10.20525/ijrbs.v10i5.1263
  3. Alm, J., Liu, Y., & Zhang, K. (2019). Financial constraints and firm tax evasion. International Tax and Public Finance, 26(1), 71–102. https://doi.org/10.1007/s10797-018-9502-7
  4. Arnold, G., & Lewis, D. (2019). Corporate Financial Management (6th ed.). Pearson Education Limited.
  5. Artini, N. M., & Setiawan, P. E. (2021). Pengungkapan Corporate Social Responsibility dan Penghindaran Pajak dengan Profitabilitas sebagai Variabel Moderasi. E-Jurnal Akuntansi, 31(9), 2277–2288. https://doi.org/10.24843/EJA.2021.v31.i09.p10
  6. Brealey, R. A., Myers, S. C., & Marcus, A. J. (2020). Fundamentals of Corporate Finance (10th ed.). McGraw-Hill Education. https://lccn.loc.gov/2018047649
  7. Dang, V. C., & Tran, X. H. (2021). The impact of financial distress on tax avoidance: An empirical analysis of the Vietnamese listed companies. Cogent Business & Management, 8(1), 1–10. https://doi.org/10.1080/23311975.2021.1953678
  8. Dewi, N. P. S. S., & Putri, I. G. A. M. A. D. (2021). Corporate Social Responsibility dan Free Cash Flow pada Tax Avoidance. E-Jurnal Akuntansi, 31(5), 1069–1081. https://doi.org/10.24843/EJA.2021.v31.i05.p01
  9. Fasita, E., Firmansyah, A., & Irawan, F. (2022). Transfer Pricing Aggressiveness, Thin Capitalization, Political Connection, Tax Avoidance: Does Corporate Governance Have A Role in Indonesia? Riset Akuntansi Dan Keuangan Indonesia, 7(1), 63–93. https://doi.org/10.23917/reaksi.v7i1.17313
  10. Fauzan, F., Arsanti, P. M. D., & Fatchan, I. N. (2021). The Effect of Financial Distress, Good Corporate Governance, and Institutional Ownership on Tax Avoidance (Empirical Study of Manufacturing Companies in the Consumer Goods Industry Sector Listed on the Indonesia Stock Exchange for the 2016-2019 period). Jurnal Riset Akuntansi Dan Keuangan Indonesia, 6(2), 154–165. https://journals.ums.ac.id/index.php/reaksi/article/view/16126
  11. Firmansyah, A., & Estutik, R. S. (2020). Environmental responsibility performance, corporate social responsibility disclosure, tax aggressiveness: Does corporate governance have a role? Journal of Governance and Regulation, 9(4), 8–24. https://doi.org/10.22495/jgrv9i4art1
  12. Global Witness. (2019). Pengalihan Uang Batubara Indonesia Bagian 3: Jaringan Luar Negeri Milik Adaro. https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/pengalihan-uang-batu-bara-indonesia-bagian-3-saatnya-adaro-membayar-pajak/
  13. Hajawiyah, A., Kiswanto, K., Suryarini, T., Yanto, H., & Harjanto, A. P. (2022). The bidirectional relationship of tax aggressiveness and CSR: Evidence from Indonesia. Cogent Business & Management, 9(1), 1–19. https://doi.org/10.1080/23311975.2022.2090207
  14. Handayani, O., & Damayanti, W. (2018). Determinants of Individual Taxpayers’ Compliance in Indonesia: A Meta-Analysis. The Indonesian Journal of Accounting Research, 21(1), 1–22. https://doi.org/10.33312/ijar.332
  15. Hasanah, A. R., & Widiastuti, N. P. E. (2022). Managerial and Financial Capabilities Become Determining Factors of Tax Avoidance Practice in Indonesia. International Journal of Finance & Banking Studies, 11(1), 207–219. https://doi.org/10.20525/ijfbs.v11i1.1702
  16. Herianti, E., & Ritnawati, E. (2021). Pengaruh Strategi Bisnis dan Corporate Social Responsibility terhadap Tax Avoidance dengan Kinerja Laba Sebagai Variabel Moderasi (Studi Empiris pada Perusahaan Jasa Properti, Real Estate dan Konstruksi Bangunan yang Terdaftar di BEI Periode 2015-2019). Jurnal Riset Bisnis, 4(2), 173–184. https://doi.org/10.35814/jrb.v4i2.2076
  17. Istiqfarosita, M., & Abdani, F. (2022). Political Connections and Thin Capitalization on Tax Avoidance During The Covid-19 Pandemic. E-Jurnal Akuntansi, 32(5), 1238–1248. https://doi.org/10.24843/EJA.2022.v32.i05.p10
  18. Iwanty, K. I., & Surjandari, D. A. (2022). The Effect of Sales Growth, Responsibility, and Institutional Ownership on Tax Avoidance with Profitability as Moderating Variables. Journal of Economics, Finance and Accounting Studies, 4(1), 423–436. https://doi.org/10.32996/jefas.2022.4.1.26
  19. Jaffar, R., Derashid, C., & Taha, R. (2021). Determinants of Tax Aggressiveness: Empirical Evidence from Malaysia. Journal of Asian Finance, Economics and Business, 8(5), 179–188. http://koreascience.or.kr/article/JAKO202112748674914.page
  20. Kurniati, D. (2020, June 23). Tax Ratio Indonesia Rendah, Ini Kata Sri Mulyani. DDTC News. https://news.ddtc.co.id/tax-ratio-indonesia-rendah-ini-kata-sri-mulyani-21793
  21. Lestari, J., & Solikhah, B. (2019). The Effect of CSR, Tunneling Incentive, Fiscal Loss Compensation, Debt Policy, Profitability, Firm Size to Tax Avoidance. Accounting Analysis Journal, 8(1), 31–37. https://doi.org/10.15294/aaj.v8i1.23103
  22. Mahardhika, D., & Surjandari, D. A. (2022). The Effect of Related Party Transaction, Financial Distress, and Firm Size on Tax Avoidance with Earnings Management as Intervening Variable. Journal of Economics, Finance and Accounting Studies, 4(3), 1–11. https://doi.org/10.32996/jefas.2022.4.3.1
  23. Minh Ha, N., Phuong Trang, T. T., & Vuong, P. M. (2022). Relationship between tax avoidance and institutional ownership over business cost of debt. Cogent Economics & Finance, 10(1), 1–11. https://doi.org/10.1080/23322039.2022.2026005
  24. Monika, C. M., & Noviari, N. (2021). The Effects of Financial Distress, Capital Intensity, and Audit Quality on Tax Avoidance. American Journal of Humanities and Social Sciences Research, 5(6), 282–287. https://www.ajhssr.com/the-effects-of-financial-distress-capital-intensity-and-audit-quality-on-tax-avoidance/
  25. Nainggolan, C., & Sari, D. (2020). Kepentingan Asing, Aktivitas Internasional, dan Thin Capitalization: Pengaruh terhadap Agresivitas Pajak di Indonesia. Jurnal Akuntansi Dan Bisnis, 19(2), 147–159. https://doi.org/10.20961/jab.v19i2.421
  26. Natalia, I., & Widyadhana, F. (2021). Thin Capitalization dan Penghindaran Pajak Setelah Penerapan PMK 169. Keberlanjutan: Jurnal Manajemen Dan Jurnal Akuntansi, 6(2), 106–115. http://dx.doi.org/10.32493/keberlanjutan.v6i2.y2021.p106-115
  27. Ningsih, I. A. M. W., & Noviari, N. (2022). Financial Distress, Sales Growth, Profitabilitas dan Penghindaran Pajak. E-Jurnal Akuntansi, 32(1), 229–242. https://doi.org/10.24843/EJA.2022.v32.i01.p17
  28. OECD. (2022). Revenue Statistics in Asia and the Pacific 2022: Strengthening Tax Revenues in Developing Asia. OECD Publishing. https://doi.org/10.1787/db29f89a-en
  29. Pranata, I. P. A. A., Adhitanaya, K., Rizaldi, M. F., Winanda, G. B. E., Lestari, N. M. I. D., & Astuti, P. D. (2021). The Effect of Corporate Social Responsibility, Firm Size, and Leverage on Tax Aggressiveness: An Empirical Evidence. Universal Journal of Accounting and Finance, 9(6), 1478–1486. https://doi.org/10.13189/ujaf.2021.090624
  30. Pratama, A. Z., & Murtin, A. (2020). Faktor Penentu Perusahaan Melakukan Penghindaran Pajak. Reviu Akuntansi Dan Bisnis Indonesia, 4(1), 93–102. https://doi.org/10.18196/rab.040156
  31. Rahayu, S., & Suryarini, T. (2021). The Effect of CSR Disclosure, Firm Size, Capital Intensity and Inventory Intensity on Tax Aggressiveness. Accounting Analysis Journal, 10(3), 191–197. https://journal.unnes.ac.id/sju/index.php/aaj/article/view/51446
  32. Rahma, A. A., Pratiwi, N., Mary, H., & Indriyenni, I. (2022). Pengaruh Capital Intensity, Karakteristik Perusahaan, Dan CSR Disclosure Terhadap Penghindaran Pajak Pada Perusahaan Manufaktur. Owner: Riset & Jurnal Akuntansi, 6(1), 677–689. https://doi.org/10.33395/owner.v6i1.637
  33. Redaksi DDTCNews. (2019, July 30). KPK: Awasi Pelanggaran Pajak Sektor Sumber Daya Alam. DDTCNews. https://news.ddtc.co.id/kpk-awasi-pelanggaran-pajak-sektor-sumber-daya-alam-16570
  34. Rohyati, Y., & Suripto, S. (2021). Corporate Social Responsibility, Good Corporate Governance, and Management Compensation against Tax Avoidance. Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 4(2), 2612–2625. https://doi.org/10.33258/birci.v4i2.1968
  35. Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2018). Corporate Finance: Core Principles & Applications (5th ed.). McGraw-Hill Education. https://lccn.loc.gov/2016035324
  36. Sadjiarto, A., Hartanto, S., Natalia, & Octaviana, S. (2020). Analysis of the Effect of Business Strategy and Financial Distress on Tax Avoidance. Journal of Economics and Business, 3(1), 238–246. https://doi.org/10.31014/aior.1992.03.01.193
  37. Sianipar, N. K., Yahya, I., & Sadalia, I. (2020). The Determinants of Tax Avoidance with Firm Size as Moderating Variable at Multinational Companies. International Journal of Research and Review, 7(7), 237–242. https://www.ijrrjournal.com/IJRR_Vol.7_Issue.7_July2020/Abstract_IJRR0031.html
  38. Simamora, S. J. P., & Sari, D. P. (2021). Influence of Independent Director, Female Director, and Thin Capitalization on Tax Avoidance. Journal of Auditing, Finance, and Forensic Accounting, 9(2), 65–76. https://doi.org/10.21107/jaffa.v9i2.12034
  39. Sritharan, N., Salawati, S., Sharon, C. C. S., & Syubaili, M. A. (2022). Corporate Tax Avoidance: A Systematic Literature Review and Research Agenda. International Journal of Academic Research in Business and Social Sciences, 12(8), 1160–1180. https://doi.org/10.6007/IJARBSS/v12-i8/14683
  40. Suwiknyo, E. (2021, August 2). Mayoritas Perusahaan Tambang Belum Transparan Soal Pajak. Bisniscom. https://ekonomi.bisnis.com/read/20210802/259/1424816/mayoritas-perusahaan-tambang-belum-transparan-soal-pajak
  41. Swandewi, N. P., & Noviari, N. (2020). Pengaruh Financial Distress dan Konservatisme Akuntansi pada Tax Avoidance. E-Jurnal Akuntansi, 30(7), 1670–1683. https://doi.org/10.24843/EJA.2020.v30.i07.p05
  42. Tax Justice Network. (2020). The State of Tax Justice 2020: Tax Justice in the time of COVID-19. https://taxjustice.net/reports/the-state-of-tax-justice-2020/
  43. Utami, M. F., & Irawan, F. (2022). Pengaruh Thin Capitalization dan Transfer Pricing Aggressiveness terhadap Penghindaran Pajak dengan Financial Constraints sebagai Variabel Moderasi. Owner: Riset Dan Jurnal Akuntansi, 6(1), 386–399. https://doi.org/10.33395/owner.v6i1.607
  44. Wijaya, H., & Mulya, H. (2020). The Effect of Corporate Social Responsibility on Tax Aggressiveness and Impact on Financial Performance. Saudi Journal of Business and Management Studies, 5(9), 498–505. https://doi.org/10.36348/sjbms.2020.v05i09.003