The Effect of Executive Share Ownership, Executive Compensation, and Independent Commissioners on Tax Avoidance

Tax avoidance turns into become most part satisfactory tax assessment practice, despite the fact that the practice isn’t in opposition to the law that can’t be acknowledged , should be forestalled, and gone against. This study expect to inform the impact of executive compensation, executive character, audit committee and audit quality on tax avoidance of mining companies listed on the Indonesia Stock Exchange. The sample selection method in this study uses purposive sampling. The sample of this study is mining companies listed on the Indonesia Stock Exchange. The data analysis technique used in this study is multiple linear regression. The results of this study proved that executive character has positive effect on tax avoidance and executive compensation, audit committee, and audit quality have no effect on tax avoidance. This research is required to be the reason for decision making by the management to not to rehearse tax avoidance and make thought for investor to not settle on speculation choices dependently on the evaluation of corporate governance perspectives that don’t influence the organization in carrying out tax avoidance practice.How to Cite:Ardillah, K., & Prasetyo C, A. (2021). Executive Compensation, Executive Character, Audit Committee, and Audit Quality on Tax Avoidance. Akuntabilitas: Jurnal Ilmu Akuntansi, 14(2), 169-186.

Download Full-text

Does executive compensation reflect equity risk incentives and corporate tax avoidance? A Japanese perspective

Corporate Ownership and Control ◽

10.22495/cocv11i2p5 ◽

2014 ◽

Vol 11 (2) ◽

pp. 60-71

Author(s):

Hiroshi Ohnuma

Keyword(s):

Executive Compensation ◽

Net Present Value ◽

Multivariate Analyses ◽

Risk Measures ◽

Estimation Method ◽

Tax Avoidance ◽

Present Value ◽

Corporate Tax ◽

Equity Risk ◽

Japanese Perspective

This study examines corporate tax avoidance as a determinant of executive compensation on the basis of equity risk incentives. Previous research shows that equity risk incentives motivate managers to make more risky, but positive net present value—investment decisions. Through correlation analyses, this study demonstrates that the tax risk measures adopted in this study are negatively associated with both the adoption of stock options and tax aggressive measures. Through multivariate analyses, this study demonstrates that executive compensations are significantly associated with our measures of tax risk positions despite the inclusion of several control variables. Moreover, this study finds consistent evidence that executive equity risk incentives are significantly associated with aggressive tax positions, regardless of the estimation method and the strength of the corporate governance function, and across several tax risk measures.

Download Full-text

Property Rights, Tax Avoidance and Capital Structure: Data from China Stock Markets

International Journal of Economics and Finance ◽

10.5539/ijef.v10n11p13 ◽

2018 ◽

Vol 10 (11) ◽

pp. 13

Author(s):

Pei Wang ◽

Kun Guo ◽

Dan Ding ◽

Shuyi Li

Keyword(s):

Capital Structure ◽

Economic System ◽

Negative Correlation ◽

Tax Avoidance ◽

Listed Companies ◽

Debt Ratio ◽

Share Ownership ◽

Significant Difference ◽

The Impact ◽

The Capital Structure

This paper investigates the influence of tax avoidance on capital structure based on share ownership under China’s economic system. Previous research has indicated that tax avoidance exits and has a potential effect on firms’ capital structure, but there is little literature focusing on this influence based on China’s economic system. In light of that, this paper uses A-share data of the Shanghai and Shenzhen stock exchange from 2007 to 2016 as samples to study the impact of tax avoidance on the capital structure based on China’s economic system. The results suggest that, firstly, there is a significant negative correlation between tax avoidance and the debt ratio of the listed companies; secondly, there is a significant difference in the effect of corporate tax avoidance on the debt ratio of different industries and different equity ownership. Besides, by regrouping the samples according to the share ownership and the degree of tax avoidance, it is revealed that China’s unique economic system would lead to an impact of tax avoidance on the capital structure that differs from other countries. Finally, it is found that there is a negative correlation between the degree of tax avoidance of the listed companies and the dynamic adjustment of assets-liability ratio through the extended study, further verifying that there is a substitution relationship between tax avoidance of the listed companies and their debt financing.

Download Full-text

PERAN LEVERAGE SEBAGAI PEMEDIASI PENGARUH KARAKTER EKSEKUTIF, KOMPENSASI EKSEKUTIF, CAPITAL INTENSITY, DAN SALES GROWTH TERHADAP TAX AVOIDANCE

Jurnal Akuntansi Trisakti ◽

10.25105/jat.v6i2.5575 ◽

2019 ◽

Vol 6 (2) ◽

pp. 301

Author(s):

Moehammad Iman Nugraha ◽

Susi Dwi Mulyani

Keyword(s):

Linear Regression ◽

Path Analysis ◽

Multiple Linear Regression ◽

Executive Compensation ◽

Stock Exchange ◽

Tax Avoidance ◽

Capital Intensity ◽

Sales Growth ◽

Purposive Sampling ◽

Positive Effect

The purpose of this research is to examine the effect of executive character, executive compensation, capital intensity, and sales growth on tax avoidance with leverage as intervening variable. This research is using samples of manufacture companies listed in Indonesia Stock Exchange during the period of 2014-2017. This research uses a purposive sampling to gather and sort data. The sample being fulfilled in this research are 43 companies with 4 (four) years observation. The hypothesis would be analysed using multiple linear regression and path analysis.The data analysing show that executive character has no effect on leverage. Executive compensasion has positive effect on leverage. Capital intensity has positive effect on leverage. Sales growth has positive effect on leverage. Leverage has positive effect on tax avoidance. Executive character has positive effect on tax avoidance. Executive compensasion has positive effect on tax avoidance. Capital intensity has positive effect on tax avoidance. Sales growth has positive effect on tax avoidance. Leverage able to mediate the effect of executive compensasion on tax avoidance, but Leverage is not able to mediate the effect of executive character capital, intensity on tax avoidance, and sales growth on tax avoidance.

Download Full-text

The Effect of Public Share Ownership on Tax Evasion: Study on Companies Listed in Indonesia Stock Exchange Between 2008-2011

International Journal of Financial Research ◽

10.5430/ijfr.v10n6p124 ◽

2019 ◽

Vol 10 (6) ◽

pp. 124

Author(s):

Muhammad Ikbal Abdullah ◽

Andi Chairil Furqan ◽

Ni Made Suwitri Parwati ◽

Asmanurhidayani Asmanurhidayani

Keyword(s):

Tax Evasion ◽

Management Practices ◽

Tax Avoidance ◽

Public Ownership ◽

Corporate Tax ◽

Public Companies ◽

Share Ownership ◽

The Government ◽

The Impact ◽

Public Share

Increasing the concentration of ownership and control of public companies in Indonesia is more likely to increase the likelihood of earnings management practices through tax avoidance. The high percentage of concentrated ownership has encouraged the government and capital market regulators to more broadly promote regulations related to tax incentives and public ownership in order to encourage more transparent practices. This study aims to analyze the policy of public ownership of tax avoidance conducted by Indonesian public companies, specifically after the regulation of Government Regulation No. 81 of 2007 concerning Reduction of Income Tax Rates for Domestic Corporate Taxpayers in the Form of Public Companies, and Minister of Financial Regulation No. 238 / PMK.03 / 2008 concerning Procedures for Implementing and Supervision of Granting Tariff Reductions for Domestic Corporate Taxpayers in the Form of Public Companies. More specifically, this study aims to analyze the impact of public share ownership on tax avoidance by Indonesian public companies. The samples of 320 observations that conducted (firm-years) during 2008-2011. The software that will be used in data analysis is STATA 12. The results showed that the increase in public ownership have a significant effect in improve the practice of corporate tax avoidance, which it is also evidenced by the significant differences in the corporate tax avoidance practices before than after the enactment of these regulations. The findings show that the greater the proportion of public share ownership would result the decreasing number of ETR or ETRC which can be indicated that the greater the practice of corporate tax avoidance. Furthermore, the ROA variable has a negative and significant effect on corporate tax avoidance practices, meaning that the greater the profitability ratio of a company can cause the reported and paid tax burden to decrease.

Download Full-text

Tax Avoidance Ditinjau Dari Capital Intensity, Leverage, Beban Iklan dan Kompensasi Eksekutif

EKONOMIS Journal of Economics and Business ◽

10.33087/ekonomis.v4i1.97 ◽

2020 ◽

Vol 4 (1) ◽

pp. 164

Author(s):

Tika Marga Pratiwi ◽

Anita Wijayanti ◽

Rosa Nikmatul Fajri

Keyword(s):

Executive Compensation ◽

Linear Regression Analysis ◽

Tax Avoidance ◽

Sampling Technique ◽

Capital Intensity ◽

Multiple Linear Regression Analysis ◽

Testing Method ◽

Final Sample ◽

Food And Beverage ◽

Advertising Expense

The use of high tax avoidance tactics by companies makes the target of government revenue not achieved. Thus making it the basis for testing capital intensity, leverage, advertising expense, executive compensation in influencing tax avoidance. Obtained a population of 14 food and beverage sub-sector companies listed on BEI in 2015-2018. With the use of purposive sampling technique as sampling, the final sample is 9 food and beverage sub-sector companies or 36 observational data. Multiple linear regression analysis was used as a testing method. The results obtained leverage and executive compensation affect tax avoidance, conversely capital intensity and advertising expense do not affect tax avoidance.

Download Full-text

Majority Shareholder on the Composition of Public Ownership and Tax Avoidance Practices in Public Companies

Academic Journal of Interdisciplinary Studies ◽

10.36941/ajis-2020-0028 ◽

2020 ◽

Vol 9 (2) ◽

pp. 109

Author(s):

Muhammad Iqbal ◽

Andi Chairil Furqan ◽

Abdul Kahar ◽

Sudirman Sudirman ◽

Muliati Muliati

Keyword(s):

Stock Exchange ◽

Tax Avoidance ◽

Public Ownership ◽

Public Companies ◽

Share Ownership ◽

Tax Incentive ◽

Trade Offs ◽

Before And After ◽

The Difference ◽

Public Share

This study attempts to analyze the effectiveness of the enforcement of regulations on public share ownership. Specifically, this study analyzes whether there are differences in the composition of public ownership between before and after the regulation was enacted. By using independent t-test, carried out on the Indonesia Stock Exchange during 2008-2011 with a total of 320 observations (company-years), regarding the effectiveness of regulations regarding the provision of tax incentives associated with the proportion of public share ownership, the difference is analyzed with the deadline for the enactment of government regulations on reduction of income tax rates for public entity taxpayers in the form of public company and the Minister of Finance Regulation regarding the procedure for implementing and monitoring the decreasing of granting tariffs for domestic corporate taxpayers in the form of public companies. The results indicate that the regulations were not proven to empirically have significant effect in increasing the proportion of public share ownership in the capital market, and are more likely to lead to trade-offs with government efforts to increase tax revenues and reduce the practice of tax avoidance by companies. Therefore, it is necessary to review the tax incentive scheme that can be given to companies going public in order to be effective in increasing public share ownership in Indonesia and not trade-off with the practice of corporate tax avoidance.

Download Full-text

The Non-Linear Relationship Between CEO Compensation Incentives And Corporate Tax Avoidance

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v33i3.9935 ◽

2017 ◽

Vol 33 (3) ◽

pp. 439-450 ◽

Cited By ~ 1

Author(s):

Seungmin Chee ◽

Wooseok Choi ◽

Jae Eun Shin

Keyword(s):

Executive Compensation ◽

Linear Relationship ◽

Ceo Compensation ◽

Tax Avoidance ◽

Corporate Tax ◽

Non Linear ◽

Prior Literature ◽

Low Levels ◽

Risk Reducing ◽

Compensation Incentives

This study examines the effect of CEO compensation incentives on corporate tax avoidance. Unlike prior literature that assumes a monotonic relation between executive compensation incentives and tax avoidance, we find a non-linear relation between the two. Specifically, we find that CEO compensation incentives exhibit a positive relation with corporate tax avoidance at low levels of compensation incentives, whereas they show a negative relation at high levels of compensation incentives. We further find that the non-linear relationship between CEO compensation incentives and corporate tax avoidance does not exist for the subsample of S&P500 firms. Collectively, we provide evidence of the two counter effective forces, namely, - the incentive alignment effect and the risk-reducing effect, - that help explain the effect of CEO compensation incentives on tax avoidance.

Download Full-text