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Article
Publication date: 5 May 2023

Prianto Budi Saptono and Ismail Khozen

Even as governments worldwide take extraordinary measures and spend unprecedented amounts of their state budgets to combat COVID-19, tax compliance remains challenging. Therefore…

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Abstract

Purpose

Even as governments worldwide take extraordinary measures and spend unprecedented amounts of their state budgets to combat COVID-19, tax compliance remains challenging. Therefore, this study employs previously identified predictors to investigate the factors that persuade individual taxpayers to comply with the law.

Design/methodology/approach

Individual taxpayers in Indonesia (N = 699) who had experienced COVID-19-related benefits were asked to assess the provided evaluation regarding the tax compliance intention and its determinants. The bootstrapping analysis was employed using smart partial least squares (SmartPLS) to test the hypotheses.

Findings

The results suggest that the perceived fiscal exchange, tax morality, tax fairness, tax complexity and the power of authority are significant determinants of tax compliance intention. This study also supports the indirect effects of numerous factors on tax compliance intention through the perceived fiscal exchange and tax morality. In practice, reminding taxpayers of how tax payments fund public services, improving taxpayer morale, increasing the perceived fairness of the tax system, streamlining the tax code and managing the effectiveness of tax administration could all lead to a greater intention to comply with the law.

Originality/value

In addition to highlighting the dynamics of tax compliance amid the unprecedented pandemic crisis, our findings also provide insight into the importance of perceived fiscal exchange and tax morality for achieving and sustaining planned behavior to comply with tax rules.

Details

International Journal of Sociology and Social Policy, vol. 43 no. 11/12
Type: Research Article
ISSN: 0144-333X

Keywords

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Article
Publication date: 28 February 2023

Arfah Habib Saragih and Syaiful Ali

The purpose of this study is to examine the impact of managerial ability on corporate tax risk and long-term tax avoidance using the upper echelons theory.

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Abstract

Purpose

The purpose of this study is to examine the impact of managerial ability on corporate tax risk and long-term tax avoidance using the upper echelons theory.

Design/methodology/approach

This study uses a quantitative method with regression models, using a sample of listed firms on the Indonesia Stock Exchange from 2011 to 2018.

Findings

The regression results report that managerial ability negatively influences tax risk and positively impacts long-run tax avoidance. Companies with more able managers have a relatively lower tax risk and greater long-run tax avoidance. The results reveal that firms with managers that possess greater abilities are more committed to long-run tax avoidance while concurrently maintaining a lower level of their tax risk. The impacts the authors report are statistically significant and robust, as proved by a series of robustness checks and additional tests.

Research limitations/implications

This study only includes firms from one developing country.

Practical implications

The empirical results might be of interest to board members while envisaging the benefits and costs of appointing and hiring managers, as well as to the tax authority and the other stakeholders interested in apprehending how managerial ability influences corporate tax risk and long-run tax avoidance practices simultaneously.

Originality/value

This study proposes and tests an explanation for the impact of managerial ability on corporate tax risk and long-run avoidance simultaneously in the context of an emerging country.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 14 August 2024

Arfah Habib Saragih

This study aims to enhance the understanding of the impact of the COVID-19 pandemic on corporate tax performance in the context of a large emerging country like Indonesia.

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Abstract

Purpose

This study aims to enhance the understanding of the impact of the COVID-19 pandemic on corporate tax performance in the context of a large emerging country like Indonesia.

Design/methodology/approach

This study uses a quantitative approach with multiple regression methods on a data set of 2,366 firm-year observations registered on the Indonesia Stock Exchange (IDX) from 2017 to 2022.

Findings

The primary empirical findings from the multivariate regressions suggest a positive and significant association between the COVID-19 pandemic and corporate tax performance in Indonesia. In other words, these listed firms have increased their tax avoidance activities during the pandemic. As firms face financial hardships due to the pandemic's effects, they tend to engage in tax avoidance practices to reduce current income tax payments, thereby enhancing their liquidity. In addition, over time, firms have adapted to use various tax policies introduced by the government in response to the pandemic to mitigate the adverse impacts of the crisis.

Research limitations/implications

This study draws on a sample solely from one emerging country.

Practical implications

The results of this study can aid governments, policymakers, tax authorities and companies in evaluating their strategies concerning preparedness and emergency responses during crises, particularly those caused by pandemics.

Originality/value

To the best of the author’s knowledge, this study is considered one of the initial efforts to examine the impact of the COVID-19 pandemic on corporate tax avoidance in an emerging country like Indonesia.

Details

Pacific Accounting Review, vol. 36 no. 3/4
Type: Research Article
ISSN: 0114-0582

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