Abstract
The purpose of this study was to determine the effect of compensation of directors, independent commissioners and government ownership on tax management. Tax management was using effective tax rates as measurement. This study uses Agency theory approach. This research departs from the fact that there are still weak corporate governance practices in Indonesia. Tax management is one way of management in increasing the value of the company by making efficient tax payments. What will management do if the capital structure under government ownership? Government ownership variables were chosen to analyze tax management behavior through multiple linear regression analysis. This research uses 16 of companies in Non-Financial BUMN listed on the Indonesia Stock Exchange in 2015-2017. A total data were 41 financial reports as research samples. Statistical Product and Service Solution Version 23 was used to analyze this research model. The results of this study indicate that directors' compensation has an effect on tax management, while for independent commissioners and government ownership it does not affect effective tax rates.
Highlights
The Panama Papers case which is widely discussed in the spotlight of the Government of Indonesia, the Panama Papers is the biggest tax avoidance scandal and can even be classified as a tax crime practice (Zaidi, 2017)
Many businessmen from well-known companies in Indonesia are involved in the Panama Papers cases; entrepreneurs divert their money to Panama to avoid tax in Indonesia
Another case is tax avoidance by national and multinational companies including the case of an internet giant company from the United States, Google which was widely discussed in 2016 by utilizing the status of a legal entity claiming that it is not BUT (Permanent Establishment) and instead of claiming PMA (Foreign Investment) whereas in Indonesia PMA itself is not subject to tax and Google is always evasive when it wants to be checked on the status of Google's legal entity
Summary
The Panama Papers case which is widely discussed in the spotlight of the Government of Indonesia, the Panama Papers is the biggest tax avoidance scandal and can even be classified as a tax crime practice (Zaidi, 2017). Many businessmen from well-known companies in Indonesia are involved in the Panama Papers cases; entrepreneurs divert their money to Panama to avoid tax in Indonesia This has become a serious problem for the Indonesian government, especially the Directorate General of Taxes to improve the governance of the tax system in Indonesia. Another case is tax avoidance by national and multinational companies including the case of an internet giant company from the United States, Google which was widely discussed in 2016 by utilizing the status of a legal entity claiming that it is not BUT (Permanent Establishment) and instead of claiming PMA (Foreign Investment) whereas in Indonesia PMA itself is not subject to tax and Google is always evasive when it wants to be checked on the status of Google's legal entity. Good tax management is tax management that is done by managing taxes properly in accordance with tax laws and regulations
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