The influence of ownership structure and political connections on tax avoidance in Indonesia

Gita Melliyani Anggreini and Hadri Kusuma
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Gita Melliyani Anggreini: Islamic University of Indonesia, Indonesia
Hadri Kusuma: Islamic University of Indonesia, Indonesia

International Journal of Research in Business and Social Science (2147-4478), 2024, vol. 13, issue 4, 324-334

Abstract: This study intends to examine the influence of ownership structure and political connections on tax avoidance using the Book Tax Differences (BTD) method. The data used is industrial entities registered on the IDX for the 2018-2022 period. By utilizing the proportional sampling method, the study sample that fulfilled the criteria was only 40 companies so 200 observational data were obtained which were used as the study sample. Panel data regression analysis is the chosen analytical method in this research which includes the Chow test, Hausman test, and hypothesis testing using Eviews as a data analytics tool. The test results imply that (i) government ownership negatively impacts tax avoidance, (ii) institutional ownership positively impacts tax avoidance, (iii) family ownership positively impacts tax avoidance, (iv) foreign ownership shows a non-significant positive impact on tax avoidance, and (v) political connections exhibit a non-significant negative impact on tax avoidance. Key Words:Tax Avoidance, Earnings Management, Political Connections, Firm Size, Leverage, Profitability, Firm Value, Firm Age.

Date: 2024
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