The Influence of The Covid-19 Pandemic on Tax Avoidance

Ivonne Caroline Wicaksono; Priyo Hari Adi

doi:10.21831/economia.v19i1.45349

The Influence of The Covid-19 Pandemic on Tax Avoidance

Ivonne Caroline Wicaksono, Universitas Kristen Satya Wacana, Indonesia
Priyo Hari Adi, Universitas Kristen Satya Wacana, Indonesia

10.21831/economia.v19i1.45349

Abstract

The Covid-19 pandemic contributes to the slowdown of Indonesia's economy; therefore, the government provides tax incentives to particular sectors during this pandemic. This research seeks to investigate the influences of the Covid-19 pandemic and tax incentives on tax avoidance. This research uses Multiple Regression Analysis to process research data of firms from consumer financing institutions, insurance firms, and banks listed on the Indonesia Stock Exchange (IDX). We generate the data from IDX's and firms' official websites. This research documents that the Covid-19 pandemic has a significant relationship with tax avoidance, and firms receiving tax incentives during the Covid-19 pandemic are less likely to avoid taxes. In conclusion, during the Covid-19 pandemic, firms tend to avoid taxes to reduce losses and avoid bankruptcy. However, tax incentives given by the government demotivate firms to avoid taxes.

Keywords

Covid-19 Pandemic, Tax Incentives, Tax Avoidance

Full Text:

PDF

References

Arief, T., & Elena, M. (2021). Ibu Sri Mulyani Jangan Lengah, Awas Praktik Penghindaran Pajak Korporasi! Retrieved from https://ekonomi.bisnis.com/read/20210408/259/1378233/ibu-sri-mulyani-jangan-lengah-awas-praktik-penghindaran-pajak-korporasi

Chytis, E., Tasios, S., & Filos, I. (2020). The Effect of Corporate Governance Mechanisms on Tax Planning during Financial Crisis: an Empirical Study of Companies Listed on the Athens Stock Exchange. International Journal of Disclosure and Governance, 17(1), 30–38. https://doi.org/10.1057/s41310-020-00072-3

Devi, S., Warasniasih, N. M. S., Masdiantini, P. R., & Musmini, L. S. (2020). The Impact of COVID-19 Pandemic on the Financial Performance of Firms on the Indonesia Stock Exchange. Journal of Economics, Business, & Accountancy Ventura, 23(2), 226–242. https://doi.org/10.14414/jebav.v23i2.2313

Gandoman, S. H. (2019). The Impact of the Financial Crisis on Tax Avoidance around the Global Financial Crisis in the Companies Accepted in Tehran Stock Exchange. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3498639

Ha, H. T. C., Uyen, N. T. U., Thao, P. D. P., & Minh, L. T. H. (2017). Financial Distress and Corporate Income Tax Avoidance of Firms in Vietnam. Asian Journal of Economics and Banking, 1(59), 115–132. Retrieved from https://ajeb.buh.edu.vn/storage/article/2017/Vol 1, No.1, September 2017/7. Huynh Thi Cam Ha.pdf

Indonesian Ministry of Finance. (2021). Insentif Perpajakan Didesain Untuk Menolong Masyarakat dan Dunia Usaha. Retrieved March 9, 2022, from https://www.kemenkeu.go.id/publikasi/berita/insentif-perpajakan-didesain-untuk-menolong-masyarakat-dan-dunia-usaha/

International Monetary Fund. (2020). Real GDP growth Annual percent change. Retrieved March 8, 2021, from https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/WEOWORLD

Khurshid, A., & Khan, K. (2021). How Covid-19 Shock will Drive the Economy and Climate? A Data-Driven Approach to Model and Forecast. Environmental Science and Pollution Research, 28(3), 2948–2958. https://doi.org/10.1007/s11356-020-09734-9

Maulani, A. R., Norisanti, N., & Sunarya, E. (2021). Pengaruh Profitabilitas dan Leverage Terhadap Penghindaran Pajak (Tax Avoidance) Pada Masa Pandemi Covid-19. COSTING:Journal of Economic, Business and Accounting, 5, 125–131. https://doi.org/https://doi.org/10.31539/costing.v5i1.2336

MUC Consulting. (2020). OECD: Insentif Pajak Berpotensi Disalahgunakan. Retrieved April 1, 2021, from https://mucglobal.com/id/news/2146/oecd-insentif-pajak-berpotensi-disalahgunakan

Nasution, D. A. D., Erlina, E., & Muda, I. (2020). Dampak Pandemi COVID-19 terhadap Perekonomian Indonesia. Jurnal Benefita, 5(2), 212. https://doi.org/10.22216/jbe.v5i2.5313

Padyanoor, A. (2020). Kebijakan Pajak Indonesia Menanggapi Krisis Covid-19 : Manfaat bagi Wajib Pajak. E-Jurnal Akuntansi, 2216–2230. https://doi.org/10.24843/EJA.2020.v30.i09.p04

Richardson, G., Taylor, G., & Lanis, R. (2015). The Impact of Financial Distress on Corporate Tax Avoidance Spanning the Global Financial Crisis: Evidence from Australia. Economic Modelling, 44, 44–53. https://doi.org/10.1016/j.econmod.2014.09.015

Rombe, A., Rahardjo, H., & Hartanto, S. (2017). Analisis Pengaruh Insentif Pajak Terhadap Penghindaran Pajak Perusahaan (Studi Empiris Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2011-2015). Jurnal Akuntansi Kontemporer, 9(2), 142–161. https://doi.org/https://doi.org/10.33508/jako.v9i2.2541

Sadjiarto, A., Hartanto, S., Natalia, & Octaviana, S. (2020). Analysis of the Effect of Business Strategy and Financial Distress on Tax Avoidance. Journal of Economics and Business, 3(1). https://doi.org/10.31014/aior.1992.03.01.193

Santoso, Y. I. (2020). Hindari Penyalahgunaan Insentif Pajak oleh Wajib Pajak, Ini Upaya kantor Pajak. Retrieved from Kontan.co.id website: https://nasional.kontan.co.id/news/hindari-penyalahgunaan-insentif-pajak-oleh-wajib-pajak-ini-upaya-kantor-pajak

Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The Impact of the Covid-19 Pandemic on Firm Performance. Emerging Markets Finance and Trade, 56(10), 2213–2230. https://doi.org/10.1080/1540496X.2020.1785863

Statistics Indonesia. (2021). Ekonomi Indonesia 2020 Turun sebesar 2,07 Persen (c-to-c). Retrieved February 19, 2021, from https://www.bps.go.id/pressrelease/2021/02/05/1811/ekonomi-indonesia-2020-turun-sebesar-2-07-persen--c-to-c-.html

Tandean, V. A. (2016). Good Corporate Governance Dan Ukuran Perusahaan Pengaruhnya Pada Tax Avoidance. Jurnal Ilmiah Akuntansi Dan Bisnis, 11(1), 54–62. https://doi.org/10.24843/jiab.2016.v11.i01.p07

Tandean, V. A., & Winnie, W. (2016). The Effect of Good Corporate Governance on Tax Avoidance: An Empirical Study on Manufacturing Companies Listed in IDX period 2010-2013. Asian Journal of Accounting Research, 1(1), 28–38. https://doi.org/10.1108/ajar-2016-01-01-b004

Tax Directorate General. (2020). PMK- 110 /PMK.03/2020 Perubahan Atas PMK 86/PMK.03/2020 Tentang Insentif Pajak Untuk Wajib Pajak Terdampak Pandemi Covid-19. Djp. Retrieved from https://www.pajak.go.id/sites/default/files/2020-09/PMK-110 INSENTIF PAJAK LANJUTAN_Rev.1.pdf

Yan, X., & Li, Y. (2020). The Influence of Earnings Management through Real Activities Manipulation: Evidence from the Coronavirus Period. Frontiers in Economics and Management, 1(8), 47–53. https://doi.org/10.6981/FEM.202008

DOI: https://doi.org/10.21831/economia.v19i1.45349