Tax Avoidance on the Banking Industry in the Era of Financial Technology Development

Abstract

Current technological developments touch the financial sector, now known as Financial Technology (Fintech). Fintech makes financial services faster and cheaper. With the development of Fintech, the banking world is also developing. Fintech and banking collaborate to get the maximum profit. Under these conditions, this study aims to analyze the factors that influence tax avoidance on banking companies listed on the Indonesia Stock Exchange. The population to observe were 43 banking companies listed on the Indonesia Stock Exchange in the 2015-2017 period. The sample selection uses the purposive sampling method, and 21 banking companies are selected according to the criteria and processed using SPSS version 25. The dependent variable used is the effective cash tax rate (CETR). Besides, the independent variables are profitability (Return on Assets), liquidity (Loan to Deposit Ratio), leverage (Debt to Total Assets), corporate governance (corporate governance based on Surat Edaran Bank Indonesia 15/15 / DPNP), and company size. The results showed that company liquidity and size significantly affected the cash effective tax rate, while profitability, leverage, and corporate governance did not affect the cash effective tax rate. This research can be used by companies to pay attention to aspects of reporting and implementation of good corporate governance, and banking companies are expected to be able to extend credit following applicable regulations. Then for tax consultants are expected to be able to use laws and regulations wisely and not be used as a loophole to make deviations in the interests of clients. Furthermore, the Government is expected to be able to increase the supervision of tax legislation so that it is not misused or used by certain interested parties and closely supervises credit disbursements made by banking companies to comply with applicable regulations.