Corporate Governance and Its Effect on Tax Avoidance: Evidence from the Indonesia Stock Exchange

Abstract

This study aims to examine the effect of corporate governance mechanisms specifically the size of the board of commissioners, the proportion of independent commissioners, managerial ownership, and institutional ownership on tax avoidance. A quantitative approach with an explanatory research design was employed. The study focused on companies listed on the Indonesia Stock Exchange (IDX) during the period 2012–2016. Secondary data were obtained from annual financial reports published on the IDX website and the Indonesian Capital Market Directory. The population comprised all companies listed on the IDX between 2012 and 2016. A purposive sampling technique, based on non-probability sampling, was used to select the sample. Data were analyzed using regression analysis with SPSS version 24. The findings reveal that both the size of the board of commissioners and managerial ownership significantly influence tax avoidance, whereas the proportion of independent commissioners and institutional ownership have no significant effect.