Determinants of Tax Avoidance in Five Countries of Southeast Asia

Meliani Mukti, Khairanis Yulita, Alexander N.H. Pranoto

Abstract


Multinational companies are using gaps in rules to pursue tax avoidance, considering various characteristics and companies practices. Therefore, this study aimed to investigate many aspects of tax avoidance. During the 2015-2021 timeframe, 518 observations from 74 samples of non-financial companies in Indonesia, Malaysia, Philippines, Singapore, and Thailand were tested using Generalized Least Squares. Companies size, financial performance, as well as research and development intensity are significantly related to tax avoidance practices in Southeast Asian countries but the degree of leverage did not affect the tax avoidance variable. The results supported the political cost theory that there was a negative relationship between companies size and tax avoidance, as well as a positive relationship showed by financial performance factors and research and development intensity. The results stated the significance of tax authorities' role in managing the activities and performance of successful companies. In addition, the importance of monitoring the benefits of tax incentives following established regulations needs to be done to enforce compliance and control tax avoidance practices in companies.

Keywords


Company Size; Financial Performance; Leverage; Research and Development; Tax Avoidance

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References


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DOI: https://doi.org/10.26905/ap.v10i1.11674

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