MANAGERIAL OWNERSHIP AND TAX AVOIDANCE IN INDONESIA

Authors

  • Millicent Bernice
  • Galumbang Hutagalung
  • Wilsa Road Betterment Sitepu
  • Enda Noviyanti Simorangkir

DOI:

https://doi.org/10.51200/ljms.v18i2.5192

Keywords:

Tax avoidance, Debt policy, Committee audit, Firm size, Managerial ownership

Abstract

Tax avoidance is a scheme designed to reduce the tax liability of an individual or entity by avoiding the payment of taxes. Tax avoidance, in contrast, involves the transfer of transactions that are not subject to taxation. This study intends to investigate the impact of debt policy, audit committee, and company size on tax avoidance, and to investigate whether managerial ownership exerts a moderating influence on the relationship between these three variables. This study implemented quantitative data with a purposive sampling technique, and obtained 32 observation data from 8 companies of information between 2019 and 2022 Indonesia Stock Exchange financial statements of real estate and property enterprises. A methodology for analysing data is Structural Equation Modelling (SEM), which uses the SmartPLS application. The novelty of this study is to add managerial ownership as a moderating variable on tax avoidance and test the data using regression analysis with the PLS approach. The percentage of a company's shares that the management owns is known as managerial ownership. Ownership by managers pushes them to exercise greater caution when making choices that may directly affect the business and their interests as shareholders. Lowering the amount of tax evasion is important for reduced personal interests. This study's findings show that managerial ownership can moderate the effect of debt policy on tax avoidance. At the same time, Debt Policy, Audit Committee, and Company Size do not affect Tax Avoidance, and Managerial Ownership is unable to moderate the effect of Audit Committee and Company Size on Tax Avoidance.

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Published

2024-10-30

How to Cite

Bernice, M., Hutagalung, G., Sitepu, W. R. B., & Simorangkir, E. N. (2024). MANAGERIAL OWNERSHIP AND TAX AVOIDANCE IN INDONESIA . Labuan E-Journal of Muamalat and Society (LJMS), 18(2), 38–48. https://doi.org/10.51200/ljms.v18i2.5192

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Section

Original Articles
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