Board Political Connection and Tax Avoidance: Ownership Structure as A Moderating Variable
Categorie(s):
Institutional ownership, managerial ownership, public ownership, tax avoidance
Author(s):
Ni Wayan Rustiarini, I Made Sudiartana
Tahun:
2021
Kode:
EJR-0191
Item Type:
Journal
Additional Info:
Article was published on Jurnal Dinamika Akuntansi dan Bisnis
Vol. 8(2), 2021, pp 128-144
ISSN/ISBN:
2355-9462
eISSN/eISBN:
2528-1143
Keyword(s):
Institutional ownership, managerial
ownership, public ownership, tax
avoidance
DOI:
https://dx.doi.org/10.24815/JDAB.V8I2.20760
Abstract :
This study aims to examine the relationship between political connection and tax avoidance and the role of ownership structure as a moderating variable. Corporate tax avoidance is calculated using effective tax rate (ETR). The research population is manufacturing companies listed on the Indonesian Stock Exchange from 2017 to 2019. Using purposive method this study gathered data from 119 companies or 357 company-year observations. This study revealed that political connection has a negative effect on ETR. This finding indicates that the political connections may lead to nepotism practices with aim to reduce the corporate tax burden. The managerial ownership strengthens the negative relationship between political connection and ETR. However, institutional ownership weakens the negative relationship between political connection and ETR. Contrary to these two results, public ownership cannot moderate the political connection and ETR.