Title : Military Connections, Corporate Governance and Corporate Tax Avoidance
Authors:
- Effezal Aswadi Abdul Wahab
- Damara Ardelia Kusuma Wardani
- Iman Haryamawan
- Mohammad Nasih
Department : Accounting
Journal Name : Pacific Accounting Review
Kinds of Journal : Q2
Keywords : Governance, Indonesia, Military Connection, Tax Avoidance
Abstract:
Purpose: This paper aims to investigate the relationship between military connections and tax avoidance in Indonesia. Further, the paper examines whether the relationships between military connections and tax avoidance are impacted by three corporate governance variables: Auditor size or big 4, Board Size and Audit Committee Independence. Indonesia's Settings Allow for a Unique Investigation, As Military Involvement has been documented. Design/Methodology/Approach: This paper uses Indonesia as the Research Settings because its military forces have a long history of business involvement. The sample includes 1,986 firm-year observations on the Indonesia stock exchange from 2010 to 2018. The period significant the time of significant change changes post-Suharto to illustrate changes in military reform. Findings: military-connected firms recorded a negative relationship with effective tax rates, indicating higher tax avoidance. The authors extend this test by considering three corporate governance variables: Big 4, Board Size and Audit Committee Independence. They find the corporate governance variables are ineffective in mitigating the positive impact of military-connected firms and corporate tax avoidance. The results remain consistent when performing endogeneity tests. Originity/Value: This paper adds to the extant literature by the examination of the impact of military connections on tax avoidance. The Finding Reflect Indonesia's Institutional Settings Depicting Military and Political Connections.
For Details : https://www.emald.com/insight/content/doi/10.1108/par-03-2023-0033/Full/html
