Determinants of Indonesian Public Listed Companies to Participate in the Tax Amnesty

Arie Pratama

doi:10.28992/ijsam.v2i2.57

Abstract

This exploratory research paper would investigate several motivations factors that drive the Indonesian public companies to participate in the Tax Amnesty program. The factors were divided into three: Tax Avoidance, Ownership Structures, and Corporate Governance. We also used profitability, size, and age as a control variable. The data collected from public companies listed in Indonesia Stock Exchange. The data will be taken from 2011–2016 companies’ financial statement. There was 135 sample selected using purposive sampling. To analyze the results, we will use binary logistic regressions. The results showed that all the variables mentioned have significant influence toward company&#39;s decision to join tax amnesty. The research showed that companies’ decision to participate in Tax Amnesty contribute by many factors, however, in each of the factors, there are different views and perspectives.

Highlights

This paper will investigate several factors that can be a motivation for Indonesian company to follow a Tax Amnesty (TA) programme. Luitel & Sobel (2007) defined tax amnesty as “Government programs that typically allow a short period of time for tax evaders to voluntarily repay previously evaded taxes without being subject to penalties and prosecution that discovery of such tax evasion normally brings”. Buckwalter et al (2014) stated that amnesty programs typically offer to forgive some or all of the penalties, fees, and interest associated with unpaid tax liabilities
The strict procedure and document to submit related to tax amnesty became the major factor of why the level of participation for the publicly owned company for the year 2016 is still low
This research showed that tax amnesty program utilized by taxpayers for forgiveness for what they're doing in their past activities

Summary

Introduction

This paper will investigate several factors that can be a motivation for Indonesian company to follow a Tax Amnesty (TA) programme. Luitel & Sobel (2007) defined tax amnesty as “Government programs that typically allow a short period of time for tax evaders to voluntarily repay previously evaded taxes without being subject to penalties and prosecution that discovery of such tax evasion normally brings”. Buckwalter et al (2014) stated that amnesty programs typically offer to forgive some or all of the penalties, fees, and interest associated with unpaid tax liabilities. Luitel & Sobel (2007) defined tax amnesty as “Government programs that typically allow a short period of time for tax evaders to voluntarily repay previously evaded taxes without being subject to penalties and prosecution that discovery of such tax evasion normally brings”. Buckwalter et al (2014) stated that amnesty programs typically offer to forgive some or all of the penalties, fees, and interest associated with unpaid tax liabilities. Leonard & Zeckhauser (1987) identify benefits and costs of tax amnesties. The costs are: 1) increased feelings by honest taxpayers that the tax system is unfair; 2) encouragement of future noncompliance (due to the anticipation of future amnesties) and

Methods

Results

Conclusion