Tax Avoidance in Jakarta Islamic Index Companies

Abstract

The trend of tax avoidance in Indonesia is predicted to increase when the government cancels some anti-tax avoidance instruments. The purpose of this study is to determine the trend of tax avoidance in JII companies so that it can show a tendency to decrease or increase tax avoidance of JII companies as a whole in the long term. This type of research is a descriptive study that uses data from the annual report of the JII company for the years 2011-2020. In general, JII companies during 2011-2020 experienced an increase in tax avoidance. This can be seen from the smaller ETR value from 2011-2020. A small ETR value is an indication that the company is doing tax avoidance.� Based on the results of this study, DGT can make forecasts related to tax avoidance, become DGT's input in detecting JII companies that do tax avoidance and evaluate anti-tax avoidance instruments that were previously abolished by the government.

The Effect of Executive Characteristics and Financial Constraints on Tax Avoidance:

“…According to Budiman (2012), the company's policy is not separated from the role of the company's executive in making policy, as well as tax avoidance. Corporate executives have different characteristics in terms of decision-making and policy in the company.…”

“…According to Hutagaol (2007), tax avoidance is an effort taken by taxpayers to reduce tax expenses legally (which does not violate tax regulations) by reducing the amount of tax expense by looking for weaknesses in tax regulations. Budiman (2012), the company that conducts tax avoidance, does so, of course, through the policies taken by the company's executives. Company executives usually have two characteristics: being risk-takers and being risk-averse.…”

Tax Avoidance: How Board of Directors Diversity Strategies are Applied in Facing Tax Audits?

“…For years, this problem has continued to hinder the government's efforts to finance public needs. Tax avoidance is a practice generally carried out by companies to minimize or even eliminate the tax burden owed to the state treasury by exploiting loopholes in tax policies and regulations (Budiman & Bandi, 2022). Kessler (2004) defines tax avoidance as efforts made by taxpayers to minimize taxes in a way that is contrary to the aims and objectives of the legislator (the intention of parliament).…”