Family ownership on tax avoidance: The moderating role of political connections
Keywords:
Family ownership, tax avoidance, political connectionsAbstract
Tax avoidance is essentially an agency problem caused by information asymmetry. Tax avoidance involves companies retaining corporate cash resources that should rightfully belong to the government. This study aims to analyze the effect of family ownership on tax avoidance, with political connections serving as a moderating variable. Tax avoidance in this study is measured using the Cash Effective Tax Rate (CETR). The research was conducted on manufacturing companies listed on the Indonesia Stock Exchange (IDX) consecutively from 2021 to 2023. The results show that family ownership has a negative and significant effect on CETR, indicating a positive and significant effect on tax avoidance. However, political connections do not strengthen the effect of family ownership on tax avoidance.
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