ARE FINANCIAL INSTITUTIONS TAX AGGRESSIVE? EVIDENCE FROM CORPORATE TAX RETURN DATA

Subagio Efendi (), Salim Darmadi () and Robert Czernkowski ()
Additional contact information
Subagio Efendi: University of Technology Sydney,
Salim Darmadi: University of Technology Sydney
Robert Czernkowski: University of Technology Sydney

Bulletin of Monetary Economics and Banking, 2022, vol. 25, issue 2, 175-204

Abstract: This study examines how financial firms’ tax aggressiveness differs from their peers in other sectors. Using confidential tax return data of the 5,968 largest Indonesian firms from 2009 to 2017, our study finds financial firms to have lower tax burdens relative to their non-financial counterparts, suggesting more opportunities for tax avoidance. Further, we document simultaneous use of tax shelters and temporary and permanent differences between accounting standards and tax laws, indicating a tendency to use the most sophisticated and less costly techniques in minimising tax burdens. These findings suggest tax aggressiveness may be one important unintended consequence of the government’s conventional prudential policy.

Keywords: Financial firms; Tax aggressiveness; Tax avoidance method; Tax return (search for similar items in EconPapers)
JEL-codes: G32 G38 H25 H26 M41 M48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1890&context=bmeb (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:25:y:2022:i:2c:p:175-204

DOI: 10.21098/bemp.v25i2.1825

Access Statistics for this article

Bulletin of Monetary Economics and Banking is currently edited by Paresh Narayan

More articles in Bulletin of Monetary Economics and Banking from Bank Indonesia Contact information at EDIRC.
Bibliographic data for series maintained by Lutzardo Tobing ( this e-mail address is bad, please contact ) and Jimmy Kathon ().