Corporate Social Responsibility and Tax Aggressiveness: Evidence from Indonesia

Fredi Kristiadi,Ahmad Maulin Naufa,Elisabeth Penti Kurniawati

doi:10.20473/jmtt.v13i2.21211

Abstract

The purpose of this research is to examine the impact of tax aggressiveness on corporate social responsibility (CSR) and its reversal. It also finds out which one of those relationships with more considerable influence. The population of this research is manufacture companies listed on the Indonesian Stock Exchange over the period 2008-2019. This research used a purposive sampling method and found 67 companies. We test the multiple regressions using the generalized method of moments (GMM) to analyze the hypotheses. The results depict that CSR does not affect tax aggressiveness. However, tax aggressiveness has a significant effect to enhance CSR. Therefore, the relationship between CSR and tax aggressiveness is only one direction.

Highlights

The taxes are compulsory contributions paid by individual or corporate taxpayers to the nations that are coercive, without receiving direct replies or benefits based on the Laws Number 28/2007
Tax aggressiveness and corporate social responsibility (CSR) are related, as taxes have a central role in the management of a company, but they have effects on the welfare of society (Vacca et al, 2020)
The purpose of this study is to provide an understanding of companies and governments about the factors that influence CSR and tax aggressiveness

Summary

Introduction

The taxes are compulsory contributions paid by individual or corporate taxpayers to the nations that are coercive, without receiving direct replies or benefits based on the Laws Number 28/2007. In Indonesia, the tax is one of the largest sources of state income It can be seen from the details of the national budget in 2016 made by the Ministry of Finance Republic of Indonesia. It contributes to the most significant state revenue (84.72%) from the taxation sector. Tax aggressiveness of multinational corporations has become a much-discussed and controversial topic, since the global financial crisis with governments around the world facing revenue shortfalls and intensified social problems.

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