The Effect of Corporate Governance on Tax Avoidance (Empirical Study of the Consumer Goods Industry Companies Listed On Indonesia Stock Exchange Period 2013-2016)

Abstract

Tax avoidance is the steps taken by a person to avoid taxes but in legal ways. This
tax evasion can be said to be a complicated and unique issue because on the one
hand it is permissible, but not desirable. This study aims to examine and analyze
the effect of Corporate Governance on Tax Avoidance. Corporate Governance is
proxied with institutional ownership, independent board of commissioners, audit
committee, and audit quality, while Tax Avoidance is proxied by Cash Effective
Tax Rate. Population in this research is all of Consumer Goods Industry Company
which listed in Indonesia Stock Exchange Year 2013-2016. The sampling
technique used Purposive Sampling method. Purposive Sampling method obtained
by the sample of 19 companies. Data analysis method used in this research is using
multiple linear regression analysis. Based on the results of model feasibility testing
(F test) shows that the independent variables (institutional ownership, independent
board of commissioner, audit committee, and audit quality) have a significant
effect on the tax avoidance variable. Hypothesis testing (t test) shows that the
institutional ownership and audit committee have an effect on Tax Avoidance,
whereas independent board and audit quality have no effect on Tax Avoidance.
keywords: Corporate Governance, Tax Avoidance.