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Section Education Accounting

Corporate Governance and Company Size in Reducing Tax Avoidance

Tata Kelola Korporasi dan Ukuran Perusahaan dalam Mengurangi Penghindaran Pajak
Vol. 20 No. 3 (2025): August:

Dimas Nugroho (1), Herman Ernandi (2)

(1) Program Studi Akuntansi, Universitas Muhammadiyah Sidoarjo, Indonesia, Indonesia
(2) Universitas Muhammadiyah Sidoarjo, Indonesia

Abstract:

Background: Tax avoidance has become a persistent issue in corporate financial management, influenced by company characteristics and governance practices. Specific Background: Previous studies have shown mixed findings regarding the relationship between firm size, profitability, leverage, and tax avoidance. Gap: Limited research has examined these variables simultaneously in the context of Indonesian listed companies. Aims: This study aims to analyze the relationship between company size, leverage, profitability, and corporate governance toward tax avoidance practices. Results: The findings indicate that corporate governance and company size significantly reduce tax avoidance, while leverage and profitability show mixed or insignificant effects. Novelty: This study provides empirical evidence of how governance quality moderates corporate tax behavior in emerging economies. Implications: The results suggest that improving governance mechanisms can enhance tax transparency and compliance in Indonesian firms.


Highlights:
• Corporate governance reduces tax avoidance through improved oversight.
• Firm size correlates with higher tax compliance levels.
• Leverage and profitability show mixed empirical outcomes.


Keywords: Corporate Governance, Tax Avoidance, Firm Size, Profitability, Leverage

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