Can reducing corporate income tax rates decrease tax avoidance?
DOI:
https://doi.org/10.54957/educoretax.v4i9.773Keywords:
Effective tax rate, Income tax rate, Tax avoidanceAbstract
This research aims to examine and analyze the effect of reducing corporate income tax rates on tax avoidance practices carried out by non-cyclical consumer sector companies. This research involves secondary data analysis using the Panel Data Regression approach with 6 research samples taken from the non-cyclical consumer sector on the LQ45 index for the 2018-2022 period. The total sample used in the study amounted to 30 observations based on purposive sampling. The test results show that reducing the corporate income tax rate positively and significantly affects tax avoidance practices in non-cyclical consumer sector companies on the LQ45 index. This research is expected to encourage the government to formulate other tax incentive policies and provide insights into the effectiveness of the implemented tax policies. One of the expected objectives of companies utilizing tax incentives is to accelerate the economic growth of society. Lower tax burdens are hoped to encourage companies to expand their businesses and potentially absorb more labor, triggering multiplier effects in the economic sector to advance public welfare. In terms of literature, this research contributes to enriching the discussion about the effect of reducing corporate tax rates on companies' tax avoidance, and it is expected to contribute to the development of tax accounting literature.
References
Alm, J. (2012). Tax evasion and tax avoidance: Theory and evidence. In S. Homburg (Ed.), Taxation and Economic Behavior (Pp. 19-45). Cambridge, MA: MIT Press.
Alstadsæter, A. , & Johannesen, N., Herry, S. L. G., & Zucman, G. (2022). Tax evasion and tax avoidance. Journal of Public Economics, 207, 104641. https://doi.org/10.1016/j.jpubeco.2021.104587
Anthony, RN., & Govindarajan, V. (1995). Management control system. Eight Edition. International Student Edition. Richard D. Irwin Inc. U.S.A.
Benkraiem, R., Gaaya, S., & Lakhal, F. (2022). Corporate tax avoidance, economic policy uncertainty, and the value of excess cash: International evidence. Economic Modelling, 108, 105738. https://doi.org/10.1016/j.econmod.2021.105738
Berle, A. A., & Means, G. (1932). The modern corporation and private property. United States of America.
Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long-run corporate tax avoidance. The Accounting Review, 83(1), 61-82. https://doi.org/10.2308/accr.2008.83.1.61
Firmansyah, A., & Kartiko, N. D. (2023). Does tax amnesty reduce tax risk in Indonesia? Journal of Accounting Research, Organization and Economics, 6(3), 241-252. https://doi.org/10.24815/jaroe.v6i3.33205
Firmansyah, A., Fauzi, I. ., Geno, M. R. P. ., Prakosa, D. K. ., & Purwaka, A. J. (2023). The moderating role of sustainability disclosure in the association between tax avoidance and cost of debt. Educoretax, 3(4), 359–370. https://doi.org/10.54957/educoretax.v3i4.629
Handayani, M. E., & Rachmawati, N. A. (2022). Dampak penurunan tarif pajak penghasilan badan terhadap tax avoidance dengan kompetensi audit sebagai variabel moderasi. Jurnal Pajak Indonesia, 6(2), 298–309. https://doi.org/10.31092/jpi.v6i2.1542
Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50, 127–178. https://doi.org/10.1016/j.jacceco.2010.09.002
Ikatan Akuntan Indonesia (IAI). (2012). Modul Pelatihan Pajak Terapan Brevet A dan B Terpadu. Jakarta: Cetakan Ke 24.
International Monetary Fund (IMF). (2023). Tax avoidance and evasion: A primer. Retrieved from Https://Www.Imf.Org/En/Home.
Kayshev, A. (2020). Compulsory collection of tax liabilities, penalties and fines from individuals-tax payers. Journal of Legal, Ethical and Regulatory Issues, 23(1), 1-10. https://www.abacademies.org/articles/compulsory-collection-of-tax-liabilities-penalties-and-fines-from-individuals-tax-payers-1544-0044-23-1-452.pdf
Kiryanto, K. (2022). Analisis perubahan tarif pajak terhadap penghindaran pajak analysis of tax rate changes to tax avoidance. Monex-Journal of Accounting Research, 11(2), 139-148. https://ejournal.poltekharber.ac.id/index.php/monex/article/view/3416/
Lietz, G. (2013). Tax avoidance vs tax aggressiveness: A unifying conceptual framework. In Working Paper. https://doi.org/10.2139/ssrn.2363828
Mohammed, H., & Tangl, A. (2023). Taxation perspectives: analyzing the factors behind viewing taxes as punishment—a comprehensive study of taxes as service or strain. Journal of Risk and Financial Management, 17(1), 1-17. https://doi.org/10.3390/jrfm17010005
Ojo, L. O/ (2020). Impact of tax administration on government revenue in developing economy: a case study of Nigeria. Advance Journal of Financial Innovation and Reporting, 4(4),1-16. https://aspjournals.org/ajfir/index.php/ajfir/article/view/5
Oktavianie, R. (2019). Dampak perubahan tarif pajak badan terhadap tax avoidance di Indonesia. Jurnal Fairness, 9(1), 1–20. https://doi.org/10.33369/fairness.v9i1.15218
Permata, A. D., Nurlaela, S., & Wahyuningsih, E. M. (2018). Pengaruh size, age, profitability, leverage dan sales growt hterhadap tax avoidance pada perusahaan sektor industri dasar dan kimia di BEI. Jurnal Akuntansi dan Pajak, 19(1), 10-20. http://dx.doi.org/10.29040/jap.v19i1.171
Puspitasari, D., Radita, F., & Firmansyah, A. (2021). Penghindaran pajak di Indonesia: profitabilitas, leverage, capital intensity. Jurnal Riset Akuntansi Tirtayasa, 6(2), 138–152. Https://Doi.Org/10.48181/Jratirtayasa.V6i2.10429.
Putri, V. R., & Putra, B. I. (2017). Pengaruh leverage, profitability, ukuran perusahaan dan proporsi kepemilikan institusional terhadap tax avoidance. Jurnal Manajemen Daya Saing, 19(1), 1-11. Https://Doi.Org/10.23917/Dayasaing.V19i1.5100.
Rego, S. O. (2003). Tax‐avoidance activities of US multinational corporations. Contemporary Accounting Research, 20(4), 805-833. https://doi.org/10.1506/VANN-B7UB-GMFA-9E6W
Rombe, A., Rahardjo, H., & Hartanto, S. (2017). Analisis pengaruh insentif pajak terhadap penghindaran pajak perusahaan (studi empiris perusahaan manufaktur yang terdaftar di bei tahun 2011-2015). Jurnal Akuntansi Kontemporer, 9(2), 142-161. https://doi.org/10.33508/jako.v9i2.2541
Shome, P. (2021). Corporate income tax—design and evidence. In Taxation History, Theory, Law and Administration. https://doi.org/10.1007/978-3-030-68214-9.
Suandy, E. (2013). Perencanaan Pajak. Edisi 4, Jakarta: Salemba Empat.
Tanjaya, C., & Nazir, N. (2021). Pengaruh profitabilitas, leverage, pertumbuhan penjualan, dan ukuran perusahaan terhadap penghindaran pajak. Jurnal Akuntansi Trisakti, 8(2), 189-208. https://doi.org/10.25105/jat.v8i2.9260
Yamashita, H., & Otogawa, K. (2007). Do Japanese firms manage earnings in response to tax rate reductions in the late 1990s? The Journal of Management Accounting, 16(1), 41-59. https://doi.org/10.24747/jma.16.1_41
Yulianty, A., Khrisnatika, M. E., & Firmansyah, A. (2021). Penghindaran pajak pada perusahaan pertambangan di Indonesia: profitabilitas, tata kelola perusahaan, intensitas persediaan, leverage. Jurnal Pajak Indonesia, 5(1), 20–31. https://doi.org/10.31092/jpi.v5i1.1201
Zain, M. (2007). Manajemen Perpajakan. Jakarta:Salemba Empat.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Satria Yudha Nugraha, Yehezkiel Victor Saud, Amrie Firmansyah
This work is licensed under a Creative Commons Attribution 4.0 International License.
