Ownership Structure On Tax Avoidance: Empirical Study On Manufacturing Companies

Abstract

The purpose of this study aims to examine the effect of ownership structure as measured by institutional and public managerial ownership on tax avoidance. The population of this study are manufacturing companies listed on the IDX in 2019. The sampling technique uses a purposive sample which is a sampling method with criteria such as manufacturing companies listed on the IDX in 2019 and companies that present annual reports during 2019. The results show that managerial ownership structure affects tax avoidance, while public ownership structure and institutional ownership structure does not affect tax avoidance in manufacturing companies listed on the Indonesia Stock Exchange in 2019. These results indicate that companies owned by managers are more likely to carry out tax avoidance because managers have full power to prepare financial statements in accordance with their wishes compared to institutional and public ownership. This research contributes to providing information to stakeholders about which type of ownership structure is more likely to avoid tax.

Pengaruh Corporate Social Responsibility (Csr), Managerial Ownership Dan Institutional Ownership Terhadap Tax Avoidance

“…Fenomena bentroknya kepentingan antara wajib pajak dengan negara serta rendahnya tingkat tax ratio di Indonesia menunjukan bahwa masih banyak aktifitas penghindaran pajak yang dilakukan di Indonesia (Yusri et al, 2022). Menurut DJP tax ratio di Indonesia pada tahun 2022 ada diangka 10,39% namun idealnya tax ratio di Indonesia ada diangka 15% menurut Direktur Pratama-Kreston Tax Research Prianto Budi Saptono (Maesaroh, 2023).…”

The Effect of Firm Size and Institutional Ownership on Tax Avoidance

“…The neverending fight against corporate tax avoidance may be because taxes now account for a larger portion of a company's pretax income and further reduce distributable profits. And they were employing pricey accountants to uncover increasingly intricate taxreducing ways (Yusri et al 2022). This tax avoidance is done because many corporate or personal taxpayers feel burdened to pay taxes.…”

“…Through their deeds of voice and power, institution owners can compel managers to concentrate on financial performance and avoid possibilities for selfish behaviour. Institutional ownership oversees the numerous administrative policies managers adopt in implementing decisions in the organization (Yusri et al 2022). Institutional Ownership can be calculated using the following:…”

“…Based on agency theory, institutional ownership is a corporate governance mechanism that can reduce an agency's conflict problems (Ratnawati et al 2018). In previous research conducted by (Yusri et al 2022) stated that institutional ownership does not affect tax avoidance. But (Ratnawati et al 2018) stated that institutional ownership negatively affects tax avoidance.…”

“…Since the beginning of tax laws, there has also been a problem with tax avoidance, widespread in all societies where taxes are collected. Due to the high corporate income tax rate, this threat is even more common among corporate taxpayers (Yusri et al 2022) High corporate competition often makes companies strive to develop strategies to increase revenue through the company's sales growth. Increasing sales is accompanied by increasing revenue, which increases the company's obligation to pay taxes (Ekaristi et al 2020).…”