The Impact of Corporate Governance on Indonesian Banking Tax Avoidance

Verawati Verawati, Sriwati Sriwati and Herni Kurniawati ()
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Verawati Verawati: Universitas Tarumanagara
Sriwati Sriwati: Universitas Tarumanagara
Herni Kurniawati: Universitas Tarumanagara

A chapter in Proceedings of the Thirteenth International Conference on Entrepreneurship and Business Management UNTAR 2024 (ICEBM 2024), 2025, pp 106-121 from Springer

Abstract: Abstract The company’s goal in operating is to make a lot of money so that the tax burden on its income can lead to aggressive tax activities, such as tax avoidance. Since it does not violate the law, tax avoidance is a legitimate tactic to lessen the tax burden. However, because businesses and the government have different interests, tax avoidance can also be a barrier to maximizing tax revenues. Implementing corporate governance, as shown by independent commissioners, institutional ownership, managerial ownership, audit committees, and audit quality, is one strategy banks can use to lessen tax avoidance. The goal of the study is to demonstrate empirically how tax avoidance practices might be impacted by banking governance, which is listed on the Indonesia Stock Exchange. Quantitative description using data from annual reports is the study methodology employed. A bank operating between 2019 and 2023 serves as the research sample. Eviews-12 is a software tool that helps with this study. According to the research’s findings, the Bank’s number of independent commissioners and the Big Four KAP audit results can both lessen the bank management’s tax evasion practices. The Bank’s audit committee, managerial ownership, and institutional ownership make up the corporate governance component, although they are powerless to stop management’s tax avoidance.

Keywords: Corporate Governance; Indonesian Banking; Tax Avoidance (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-809-7_9

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