Institutional Ownership, Audit Quality, and Firm Size in Relation to Tax Avoidance in Indonesian Mining Firms
DOI:
https://doi.org/10.56127/jukim.v5i05.3054Keywords:
Audit Quality, Firm Size, Tax Avoidance, Cash Effective Tax Rate, Institutional OwnershipAbstract
Tax avoidance remains a concern in Indonesia's mining sector due to complex business operations and corporate tax planning practices. Inconsistent findings regarding corporate governance mechanisms and firm characteristics highlight the need for further investigation. Objective: This study aimed to examine the effects of institutional ownership, audit quality, and firm size on tax avoidance among mining companies listed on the Indonesia Stock Exchange during 2021–2025. Method: A quantitative associative design was employed using purposive sampling, yielding eight companies and 40 firm-year observations. Secondary data from annual financial reports were analyzed using fixed-effects panel regression in EViews 13, with Cash Effective Tax Rate (CETR) as the dependent variable. Findings: Institutional ownership (β = 0.462103; p = 0.5840) and audit quality (β = 0.057743; p = 0.1477) were not statistically significant, whereas firm size exhibited a significant negative association with CETR (β = −1.385202; p = 0.0004). The model yielded an adjusted R² of 0.416832. Implications: Firm size warrants consideration when evaluating corporate tax payment patterns, while ownership and audit characteristics require further examination. Originality: This study jointly evaluates three corporate characteristics using firm-level fixed effects in Indonesian mining companies during 2021–2025.
References
Chintia, V., & Susanto, Y. K. (2022). Pengaruh corporate governance terhadap tax avoidance. Media Ilmiah Akuntansi, 10(1), 43–56. doi:10.34208/mia.v10i1.20
Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79(1), 145–179. doi:10.1016/j.jfineco.2005.02.002
Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long-run corporate tax avoidance. The Accounting Review, 83(1), 61–82. doi:10.2308/accr.2008.83.1.61
Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50(2–3), 127–178. doi:10.1016/j.jacceco.2010.09.002
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. doi:10.1016/0304-405X(76)90026-X
Khan, M., Srinivasan, S., & Tan, L. (2017). Institutional ownership and corporate tax avoidance: New evidence. The Accounting Review, 92(2), 101–122. doi:10.2308/accr-51529
Nurhidayah, L. P., Wibawaningsih, E. J., & Fahria, R. (2021). Pengaruh leverage, kepemilikan institusional dan kualitas audit terhadap tax avoidance. Prosiding BIEMA (Business Management, Economic, and Accounting National Seminar), 2(1), 627–642.
Pradita, P. K., & Pradita, Y. A. (2023). Pengaruh corporate governance dan kualitas audit terhadap tax avoidance. Balance Vocation Accounting Journal, 7(2). doi:10.31000/bvaj.v7i2.9681
Prasetiyo, T., Djaddang, S., & Ahmar, N. (2021). Determinan tax avoidance dengan kepemilikan institusional sebagai pemoderasi (Studi pada perusahaan pertambangan). Jurnal Riset Akuntansi dan Keuangan. [Volume, issue, and page numbers require verification]
Rego, S. O. (2003). Tax-avoidance activities of U.S. multinational corporations. Contemporary Accounting Research, 20(4), 805–833. doi:10.1506/VANN-B7UB-GMFA-9E6W
Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783. doi:10.1111/j.1540-6261.1997.tb04820.x
Slemrod, J. (2004). The economics of corporate tax selfishness. National Tax Journal, 57(4), 877–899. doi:10.17310/ntj.2004.4.06
Srimindarti, C., Widyaningsih, C. A., Oktaviani, R. M., & Hardiningsih, P. (2022). The effect of corporate governance and company size on tax avoidance. Jurnal Organisasi dan Manajemen, 18(1), 114–125.
Sulistiyanti, U., & Saputra, A. D. (2020). Determinants of tax avoidance: Evidence from Indonesian mining industry. Journal of Contemporary Accounting, 2(3), 165–174. doi:10.20885/jca.vol2.iss3.art5
Tirana, K. P., & Sisdyani, E. A. (2024). Praktik penghindaran pajak: Multinasionalitas, transfer pricing, dan good corporate governance. E-Jurnal Akuntansi, 34(10). doi:10.24843/EJA.2024.v34.i10.p14
Zimmerman, J. L. (1983). Taxes and firm size. Journal of Accounting and Economics, 5, 119–149. doi:10.1016/0165-4101(83)90008-3
