The Effect of Good Corporate Governance on Tax Avoidance of Listed Companies in Indonesian Stock Exchange in 2015-2017

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 15 March 2019

The Effect of Good Corporate Governance on Tax Avoidance of Listed Companies in Indonesian Stock Exchange in 2015-2017

Retnaningtyas Widuri, Winnie Wijaya, Jessica Effendi, Elvina Cikita

Petra Christian University, Indonesia

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10.31014/aior.1992.02.01.72

Abstract

The purpose of this research was to find out the effect of mechanism good corporate governance on tax avoidance. The mechanism of good corporate governance was proxied in executive compensation, executive character, company size, institutional ownership, the proportion of board of commissioners, audit committee and audit quality. The sample in this study were 238 companies listed on the Indonesia Stock Exchange and obtained 714 research data. In this study, tax avoidance was measured by using the current effective tax rate (CETR). The results of this study concluded that executive compensation, executive character, institutional ownership, audit committee, and audit quality had an effect on tax avoidance. In addition, the size of the company and independent board of commissioners didn't affect on tax avoidance.

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