ISSN: 2225-8329
Open access
The purpose of this study is to investigate how tax law enforcement, related-party transactions, and external audit affect conforming tax avoidance. This study employs a less commonly used metric, namely the tax payment-to-operating cash flow ratio in measuring the level of conforming tax avoidance. Using panel data regression analysis and a fixed effect model, the study looks at manufacturing companies that were listed between 2012 and 2021 on the Indonesia Stock Exchange. As independent factors, control variables including company size, leverage, profitability, and asset mix, are included. The results indicate that tax law enforcement, related-party transactions, and external audit do not significantly affect conforming tax avoidance practices. Meanwhile, conforming tax avoidance is significantly impacted by control characteristics like company size and leverage. The authors suspect that the tax amnesty program initiated by the government during the research period could influence the study's results due to the amnesty's provisions for penalty waiver and cessation of tax inspections for participating taxpayers. This study adds to the body of studies on tax avoidance by exploring a relatively under-researched metric.
Ajija, S. R., Sari, D. W., Setianto, R. H., & Primanti, M. R. (2011). Cara cerdas menguasai Eviews. Jakarta: Salemba Empat.
Alfiyah, N., Subroto, B., & Ghofar, A. (2022). IS TAX AVOIDANCE CAUSED BY POLITICAL CONNECTIONS AND EXECUTIVE CHARACTERISTICS?. Jurnal Akuntansi Multiparadigma, 13(1), 32-41.
Alkausar, B., Kawakibi, F. B., & Lasmana, M. S. (2021). Corporate governance and tax aggressiveness: agency theory relationship. Jurnal Reviu Akuntansi Dan Keuangan, 11(1), 138-149.
Armstrong, C. S., Blouin, J. L., Jagolinzer, A. D., & Larcker, D. F. (2015). Corporate governance, incentives, and tax avoidance. Journal of Accounting and Economics, 60(1), 1–17.
Aryotama, P., & Firmansyah, A. (2019). The effect of corporate diversification, customer concentration on tax avoidance in Indonesia. Jurnal Akuntansi Dan Bisnis, 19(2), 196-207.
Atwood, T. J., Drake, M. S., Myers, J. N., & Myers, L. A. (2012). Home country tax system characteristics and corporate tax avoidance: international evidence. The Accounting Review, 87(6), 1831–1860.
Azizah, N., & Kusmuriyanto, K. (2016). The effect of related party transaction, leverage, commissioners and directors compensation on tax aggressiveness. Accounting Analysis Journal, 5(4), 307-316.
Barker, J., Asare, K., & Brickman, S. (2017). Transfer pricing as a vehicle in corporate tax avoidance. Journal of Applied Business Research (JABR), 33(1), 9-16.
Bauer, A. M. (2016). Tax avoidance and the implications of weak internal controls. Contemporary Accounting Research, 33(2), 449-486.
Begini Tren Penerimaan Pajak 1 Dekade Terakhir, 2021 Jadi Titik Balik. (n.d.). https://news.ddtc.co.id/begini-tren-penerimaan-pajak-1-dekade-terakhir-2021-jadi-titik-balik-38783.
Chen, K. P., & Chu, C. C. (2005). Internal control versus external manipulation: A model of corporate income tax evasion. rand Journal of Economics, 151-164.
Crocker, K. J., & Slemrod, J. (2005). Corporate tax evasion with agency costs. Journal of Public Economics, 89(9-10), 1593-1610.
Damayanti, H. H., & Prastiwi, D. (2017). Peran OECD dalam meminimalkan upaya tax agresiveness pada perusahaan multinationality. Jurnal Akuntansi Multiparadigma, 8(1), 79-89.
Desai, M. A., Dyck, A., & Zingales, L. (2007). Theft and taxes. Journal of Financial Economics, 84(3), 591–623.
Dewi, K. S., & Yasa, G. W. (2020). The effects of executive and company characteristics on tax aggressiveness. Jurnal Ilmiah Akuntansi Dan Bisnis, 15(2), 280.
dos Santos, L. P. G., Soares, P. A., de Freitas, S. C., & Dias, J. M. (2021). The influence of tax services provided by auditors on tax avoidance: evidence from Brazil. Revista de Contabilidade e Organizações, 15, 1-14.
Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2019). When does tax avoidance result in tax uncertainty?. The Accounting Review, 94(2), 179-203.
Ellyani, M., & Hudayati, A. (2019). The Role of Related Party Transaction and Earning Management in Reducing Tax Aggressiveness. Riset Akuntansi dan Keuangan Indonesia, 4(3), 134-145.
Fauzan, F., Ayu, D. A., & Nurharjanti, N. N. (2019). The effect of audit committee, leverage, return on assets, company size, and sales growth on tax avoidance. Riset Akuntansi Dan Keuangan Indonesia, 4(3), 171-185.
Fitri, R. A., & Munandar, A. (2018). The effect of corporate social responsibility, profitability, and leverage toward tax aggressiveness with size of company as moderating variable. Binus Business Review, 9(1), 63-69.
Ghozali, I. (2016). Aplikasi analisis multivariete dengan program IBM SPSS 23.
Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics. McGraw-hill.
Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of accounting and Economics, 50(2-3), 127-178.
Hogan, B., & Noga, T. (2015). Auditor-provided tax services and long-term tax avoidance. Review of Accounting and Finance, 14(3), 285-305.
Hoopes, J. L., Mescall, D., & Pittman, J. A. (2012). Do IRS audits deter corporate tax avoidance?. The accounting review, 87(5), 1603-1639.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305–360
Jessica, J., & Toly, A. A. (2014). Pengaruh pengungkapan corporate social responsibilty terhadap agresivitas pajak. Tax & Accounting Review, 4(1), 222.
Klassen, K. J., Lisowsky, P., & Mescall, D. (2016). The role of auditors, non-auditors, and internal tax departments in corporate tax aggressiveness. The Accounting Review, 91(1), 179-205.
Maraya, A. D., & Yendrawati, R. (2016). Pengaruh corporate governance dan corporate social responsibility disclosure terhadap tax avoidance: studi empiris pada perusahaan tambang dan CPO. Jurnal Akuntansi dan Auditing Indonesia, 20(2), 147-159.
McGuire, S. T., Omer, T. C., & Wang, D. (2012). Tax avoidance: Does tax-specific industry expertise make a difference?. The accounting review, 87(3), 975-1003.
Nurhidayah, L. I., & Rahmawati, I. P. (2022). Menguak Praktik Penghindaran Pajak pada Perusahaan Nonkeuangan. Jurnal Akuntansi Multiparadigma, 13(2), 393-403.
Nurhidayati, N., & Fuadillah, H. (2018). The Influence of Income Shifting Incentives towards The Tax Haven Country Utilization: Case Study on the Companies listed in Indonesian Stock Exchange. Jurnal Akuntansi dan Keuangan, 20(1), 27-38.
Park, S. (2018). Related party transactions and tax avoidance of business groups. Sustainability, 10(10), 3571.
Putra, Z. K. P., & Suhardianto, N. (2020). The influence of political connection on tax avoidance. Jurnal Akuntansi Dan Keuangan, 22(2), 82-90.
Putri, T. R. F., & Suryarini, T. (2017). Factors Affecting Tax Avoidance on Manufacturing Companies Listed on IDX. Accounting Analysis Journal, 6(3), 407-419.
Rezeki, D. S., Widarjo, W., Sudaryono, E. A., & Syafiqurrahman, M. (2021). Related Party Transactions and Tax Avoidance: Study on Mining Company in Indonesia. Jurnal Akuntansi dan Bisnis, 21(2), 283-293.
Richardson, G., Taylor, G., & Lanis, R. (2013). The impact of board of director oversight characteristics on corporate tax aggressiveness: An empirical analysis. Journal of Accounting and Public Policy, 32(3), 68-88.
Salihu, I. A., Obid, S. N. S., & Annuar, H. A. (2013). Measures of corporate tax avoidance: Empirical evidence from an emerging economy. International Journal of Business and Society, 14(3), 412.
Sandy, S., & Lukviarman, N. (2015). Pengaruh corporate governance terhadap tax avoidance: Studi empiris pada perusahaan manufaktur. Jurnal Akuntansi dan Auditing Indonesia, 19(2), 85-98.
Sari, D., Utama, S., & Rahayu, N. (2021). Transfer pricing practices and specific anti-avoidance rules in Asian developing countries. International Journal of Emerging Markets, 16(3), 492-516.
Satyadini, A. E. (2018). Empirical Approach of Tax Avoidance Risk Assessment. Jurnal Kajian Ekonomi & Keuangan, 2(1).
Sekaran, U. (2013). Metodologi Penelitian Riset Bisnis. Edisi XII. Erlangga, Jakarta.
Shackelford, D. A., & Shevlin, T. (2001). Empirical tax research in accounting. Journal of accounting and economics, 31(1-3), 321-387.
Sugeng, S., Prasetyo, E., & Zaman, B. (2020). Does capital intensity, inventory intensity, firm size, firm risk, and political connections affect tax aggressiveness?. JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manejemen, 17(1), 78-87.
Sunarsih, U., & Oktaviani, K. (2016). Good corporate governance in manufacturing companies tax avoidance. Etikonomi, 15(2), 194863.
Suryatimur, K. P., Panjawa, J. L., & Khabibah, N. A. (2020). Pengaruh Kinerja Perusahaan Dan Corporate Governance Terhadap Tax Avoidance Pada Perusahaan Sektor Manufaktur Tahun 2016–2018. AdBispreneur: Jurnal Pemikiran dan Penelitian Administrasi Bisnis dan Kewirausahaan, 5(2), 171-181.
Suyono, E. (2018). External auditors’ quality, leverage, and tax aggressiveness: Empirical evidence from the Indonesian stock exchange. Media Ekonomi dan Manajemen, 33(2).
Taylor, G., & Richardson, G. (2012). International corporate tax avoidance practices: Evidence from Australian firms. The International Journal of Accounting, 47(4), 469-496.
Turyatini, T. (2017). The analysis of tax avoidance determinant on the property and real estate companies. Jurnal Dinamika Akuntansi, 9(2), 143-153.
Wang, F., Xu, S., Sun, J., & Cullinan, C. P. (2020). Corporate tax avoidance: A literature review and research agenda. Journal of Economic Surveys, 34(4), 793-811.
Watts, R., & Zimmerman, J. (1986). Positive theory of accounting. Englewood Cliffs, NY: Prentice-Hall.
Widarjo, W., Sudaryono, E. A., Sutopo, B., Syafiqurrahman, M., & Juliati, J. (2021). The Moderating Role of Corporate Governance on the Relationship between Political Connections and Tax Avoidance. Jurnal Dinamika Akuntansi, 13(1), 62-71.
Widyastuti, S. M., Meutia, I., & Candrakanta, A. B. (2022). The effect of Leverage, Profitability, Capital Intensity and Corporate Governance on Tax Avoidance. Integrated Journal of Business and Economics, 6(1), 13-27.
(Tui & Bandi, 2024)
Tui, N. H., & Bandi, B. (2024). External Factors and Conforming Tax Avoidance – An Empirical Study in Indonesia. International Journal of Academic Research in Accounting Finance and Management Sciences, 14(1), 279–294.
(Tui & Bandi, 2024)
Tui, N. H., & Bandi, B. (2024). External Factors and Conforming Tax Avoidance – An Empirical Study in Indonesia. International Journal of Academic Research in Accounting Finance and Management Sciences, 14(1), 278–293.