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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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doi
open access

Published: 17 February 2020

Analysis of the Effect of Business Strategy and Financial Distress on Tax Avoidance

Arja Sadjiarto, Sylvia Hartanto, Natalia, Stephani Octaviana

Petra Christian University, Indonesia

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.03.01.193

Pages: 238-246

Keywords: Business Strategy, Corporate Tax Avoidance, Defender, Financial Distress, Prospector

Abstract

In recent years, tax avoidance has been frequently discussed and has attracted the attention of the Indonesian government. Many factors affect tax avoidance, one of it is business strategy. Not only business strategies, but also financial distress can also be one of the factors causing tax avoidance. Related to the problem, in this study we would examine the impact of business strategies and financial distress of Indonesian companies to tax avoidance practices. The samples of this research were 292 companies in the manufacturing, trade and construction sectors which were listed on the Indonesia Stock Exchange in period 2015-2018 and obtained 1168 research data. This research used multiple linear regression method. Our regression results proved that the prospector business strategy has a positive impact on tax avoidance, while the defender's business strategy has a negative impact on tax avoidance. Meanwhile, related to financial distress, our results showed that financial distress has a positive impact on tax avoidance.

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