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Review
. 2022 Aug 10;8(8):e10155.
doi: 10.1016/j.heliyon.2022.e10155. eCollection 2022 Aug.

Political connections, investment opportunity sets, tax avoidance: does corporate social responsibility disclosure in Indonesia have a role?

Amrie Firmansyah  1 , Amardianto Arham  1 , Resi Ariyasa Qadri  1 , Puji Wibowo  1 , Ferry Irawan  1 , Nur Aisyah Kustiani  1 , Suparna Wijaya  1 , Arifah Fibri Andriani  1 , Zef Arfiansyah  1 , Lestari Kurniawati  1 , Azas Mabrur  1 , Agung Dinarjito  1 , Rahayu Kusumawati  1 , Moh Luthfi Mahrus  1
Affiliations
Review

Political connections, investment opportunity sets, tax avoidance: does corporate social responsibility disclosure in Indonesia have a role?

Amrie Firmansyah et al. Heliyon. .

Abstract

This study aims to obtain empirical evidence of the effect of political connections and investment opportunity sets on tax avoidance. In addition, the use of corporate social responsibility in this study as a moderating variable aims to examine the implementation of sustainability by companies, which is a global issue of concern to many parties today. Corporate social responsibility has rarely been used in previous studies as a moderating variable in examining the relationships between investment opportunity sets and tax avoidance and political connections and tax avoidance. This study analyzed 42 manufacturing companies listed on the Indonesia Stock Exchange from 2014 to 2019, selected through a purposive sampling method to produce 252 observations. This study used a quantitative method with two-panel data regression models, namely the model and without moderation. The results suggest that political connections and investment opportunity sets positively affect tax avoidance. Meanwhile, corporate social responsibility disclosure can weaken the positive effect of political connections and investment opportunity sets on tax avoidance. This study indicates that the Indonesia Tax Authority should include sustainability issues in refining existing tax policies.

Keywords: Investment opportunity sets; Political connections; Sustainability; Tax avoidance.

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Conflict of interest statement

The authors declare no conflict of interest.

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