Presenters: Wakhyuni, Indriyana Puspitosari
Affiliation: State Islamic University Raden Mas Said Surakarta
Room: 5
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Wakhyuni and Indriyana Puspitosari from State Islamic University Raden Mas Said Surakarta presented their insightful research titled “The Effect of Board Characteristics on Tax Aggressiveness.” The study focused on examining how various board attributes impact tax aggressiveness in energy companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022.
The researchers chose energy companies for their study due to the sector’s notable involvement in tax avoidance, as highlighted by the Directorate General of Taxes (DJP). The population consisted of all 45 energy companies listed on the IDX during the specified period, with 214 observations meeting the predetermined criteria.
Using secondary data sourced from annual reports available on www.idx.co.id and the respective company websites, the researchers applied the fixed effect model for data analysis. The study aimed to explore the influence of board size, independent commissioners, board compensation, and board gender diversity on tax aggressiveness.
Key findings from the research revealed that board size has a significantly positive impact on tax aggressiveness. This suggests that the number of directors in a company can significantly influence corporate governance decisions related to tax control. In contrast, the variables of independent commissioners, board compensation, and board gender diversity did not show a significant effect on tax aggressiveness.
Wakhyuni and Puspitosari concluded that the size of the board plays a crucial role in shaping tax strategies within energy companies. Larger boards may possess diverse perspectives and expertise, potentially leading to more aggressive tax planning. However, the lack of significant impact from independent commissioners, board compensation, and gender diversity indicates that these factors may not be as influential in the context of tax aggressiveness.
This research contributes to a deeper understanding of corporate governance and its implications for tax practices in the energy sector. The findings highlight the importance of considering board composition when evaluating corporate tax strategies and underscore the need for further studies to explore additional factors that may influence tax aggressiveness.
The presentation at ICIES 2024 provided valuable insights into the dynamics of board characteristics and their impact on tax behavior, offering a foundation for future research and policy development aimed at enhancing corporate governance and tax compliance.