Corporate governance and political connection towards the tax aggressiveness of manufacturing companies in Indonesia

Ni Luh Putri Setyastrini; Imam Subekti; Arum Prastiwi

doi:10.21744/irjmis.v8n1.1118

Authors

Ni Luh Putri Setyastrini
putrisetyastrini@gmail.com
Accounting Department, Brawijaya University, Indonesia
Imam Subekti Accounting Department, Brawijaya University, Indonesia
Arum Prastiwi Accounting Department, Brawijaya University, Indonesia

Keywords:

corporate governance, effective tax rate, political connection, tax aggressiveness, tax avoidance

Abstract

Tax aggressiveness is one of the weaknesses of tax collection with the mechanism of the self-assessment system. Tax aggressiveness is an effort by a company to reduce tax fees through tax planning in which from the legal point of view is deemed as a gray area. This research aims to examine and analyze the impact of company governance as well as a political connection towards tax aggressiveness. This research was conducted on the manufacturing sector in Indonesia Stock Exchange in 2016-2018. The research samples were 80 companies with 240 observations. The data of this research was analyzed by utilizing the multiple regression analysis. The research outcome revealed that the company governance did not affect tax aggressiveness, whereas political connection positively impacted the tax aggressiveness.

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