The Effect of Corporate Tax Planning On Firm Value

Silvy Christina ()
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Silvy Christina: Trisakti School of Management, Kyai tapa No. 20, 11440, Jakarta, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:

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Abstract: Objective � This research aims to empirically examine the effect of tax planning on firm value. The population of this research consists of manufacturing companies listed on the Indonesian Stock Exchange (IDX) from 2014 to 2016. Methodology/Technique � This research uses 3 recent years and uses variables not used in previous research. The 43 respondents were chosen using purposive sampling. The hypotheses were tested using multiple regressions with Eviews program to determine the relationship between each independent variable to firm value. Findings � The empirical results show that tax planning that is measured by the cash effective tax rate has a negative effect on firm value, while tax planning measured by effective cash rate and tax savings has no effect on firm value. Novelty � The study recommends the need for firms to institute more robust tax planning practices that will help reduce their effective tax liabilities and therefore improve their overall value. Firms that engage in better tax planning practices are likely to get higher firm value. Type of Paper: Empirical.

Keywords: Firm Performance; Tax Planning; Effective Tax Rate; Cash Effective Tax Rate; Tax Saving. (search for similar items in EconPapers)
JEL-codes: M40 M42 M49 (search for similar items in EconPapers)
Pages: 4
Date: 2019-03-19
New Economics Papers: this item is included in nep-acc, nep-cfn and nep-sea
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Published in Accounting and Finance Review, Volume 4, Issue 1

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