Unveiling Tax Avoidance: The Mediating Role of Sustainability Reporting Quality in Board Influence
DOI:
https://doi.org/10.47065/arbitrase.v6i3.2686Keywords:
Tax Avoidance; Board Size; Sustainability Report Quality; Agency Theory; Energy CompaniesAbstract
This study investigates the effect of board size on tax avoidance in Indonesian public companies, with sustainability reporting quality (SRQ) as a mediating variable. Using panel data from 48 energy sector firms listed on the Indonesia Stock Exchange from 2017 to 2023, multiple linear regression analysis is employed. Drawing on agency theory, this study examines whether board size enhances monitoring effectiveness and reduces information asymmetry, thereby constraining managerial tax behavior. The results show that board size does not have a significant direct effect on tax avoidance, indicating that governance structure alone is insufficient to influence complex tax decisions in capital-intensive industries. However, board size has a significant positive effect on sustainability reporting quality, suggesting stronger oversight and improved disclosure quality. Despite this, sustainability reporting quality does not have a significant effect on book–tax differences, and its mediating role in the relationship between board size and tax avoidance is rejected. Among control variables, only profitability ROA significantly affects tax avoidance, highlighting financial performance as the dominant agency-related driver of managerial tax decisions. Overall, the findings suggest that agency pressures arising from profitability outweigh governance and sustainability disclosure mechanisms in shaping corporate tax behavior.
Downloads
References
Ahmad, Mansoor. 2025. “Performance of Normality Tests Under Non-Normal Distributions?: A Simulation Approach.” 4(2):148–58.
Aji, Fajar Pratama, and Sartika Wulandari. 2022. “Analisis Determinan Penghindaran Pajak Pada Perusahaan Industri Barang Konsumsi.” Owner 6(3):1591–1604. doi: 10.33395/owner.v6i3.915.
Al-Shaer, Habiba, and Mahbub Zaman. 2016. “Board Gender Diversity and Sustainability Reporting Quality.” Journal of Contemporary Accounting and Economics 12(3):210–22. doi: 10.1016/j.jcae.2016.09.001.
Almasarwah, Adel, Wasfi Alrawabdeh, Walid Masadeh, and Munther Al-Nimer. 2022. “Corporate Governance: Association the Spots between Institutional Enhancement, Organisational Modification and Earnings Quality.” Journal of Financial Regulation and Compliance 30(2):240–62. doi: 10.1108/JFRC-04-2021-0027.
Alta’any, Mohammad, Ven Tauringana, Alaa Zalata, and Laura Obwona Achiro. 2024. “Unpacking Sustainability Reporting Dimensions: The Impact of Board Characteristics.” Journal of Financial Reporting and Accounting. doi: 10.1108/JFRA-09-2023-0568.
Amidu, Mohammed, William Coffie, and Philomina Acquah. 2019. “Transfer Pricing, Earnings Management and Tax Avoidance of Firms in Ghana.” Journal of Financial Crime 26(1):235–59. doi: 10.1108/JFC-10-2017-0091.
Drugmand, Dana. 2020. “Shell’s Latest Annual Report: More Greenwashing?” Desmog 1. Retrieved (https://www.desmog.com/2020/03/19/shell-s-latest-annual-report-more-greenwashing).
Erin, Olayinka, Alex Adegboye, and Omololu Adex Bamigboye. 2022. “Corporate Governance and Sustainability Reporting Quality: Evidence from Nigeria.” Sustainability Accounting, Management and Policy Journal 13(3):680–707. doi: 10.1108/SAMPJ-06-2020-0185.
Fama, Eugene F., and Michael C. Jensen. 1983. “Separation of Wonership and Control.” Journal of Law and Economics 26(2):301–25.
Febriansyah, Angky, and Fini Oktafiani. 2021. “Penghindaran Pajak Yang Dipengaruhi Oleh Komite Audit Dan Ukuran Perusahaan.” Jurnal Riset Akuntansi 13(2):88–100. doi: 10.34010/jra.v13i2.4976.
Fuadah, Luk Luk, Kencana Dewi, Mukhtaruddin Mukhtaruddin, Umi Kalsum, and Anton Arisman. 2022. “The Relationship between Sustainability Reporting, E-Commerce, Firm Performance and Tax Avoidance with Organizational Culture as Moderating Variable in Small and Medium Enterprises in Palembang.” Sustainability (Switzerland) 14(7). doi: 10.3390/su14073738.
Global witness. 2019. “Adaro Terindikasi Pindahkan Ratusan Juta Dolar AS Ke Jaringan Perusahaan Luar Negeri Untuk Menekan Pajak.” Global Witness. Retrieved (https://globalwitness.org/id/press-releases/adaro-terindikasi-pindahkan-ratusan-juta-dolar-as-ke-jaringan-perusahaan-luar-negeri-untuk-menekan-pajak/).
Hanlon, Michelle, and Shane Heitzman. 2010. “A Review of Tax Research.” Journal of Accounting and Economics 50(2–3):127–78. doi: 10.1016/j.jacceco.2010.09.002.
Hidayatullah, Mochammad Ryan. 2024. “Kontribusi Minerba Capai Rp99,3 Triliun September 2024, Realisasi Target 87%.” Retrieved (https://ima-api.org/detail/news/mining/kontribusi-minerba-capai-rp993-triliun-september-2024-realisasi-target-87).
ICIJ. 2021. “Offshore Havens and Hidden Riches of World Leaders and Billionaires Exposed in Unprecedented Leak.” The International Consortium of Investigative Journalists. Retrieved (https://www.icij.org/investigations/pandora-papers/global-investigation-tax-havens-offshore/).
Indonesia Corruption Watch. 2021. “Pandora Papers: Kegagapan Negara Atas Kejahatan Lintas Negara.” Indonesia Corruption Watch. Retrieved June 14, 2025 (https://antikorupsi.org/id/article/pandora-papers-kegagapan-negara-atas-kejahatan-lintas-negara).
Jensen, Michael C., and William H. Meckling. 1976. “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.” Journal of Financial Economics 3 No. 4:305–60.
Judd, Charles M., and David A. Kenny. 1981. “Process Analysis: Estimating Mediation in Treatment Evaluations.” Evaluation Review 5(5):602–19. doi: 10.1177/0193841X8100500502.
Khelil, Imen, and Hichem Khlif. 2023. “Tax Avoidance in Family Firms: A Literature Review.” Journal of Financial Crime 30(4):1021–35. doi: 10.1108/JFC-03-2022-0064.
Koay, Guo Yao, and Noor Sharoja Sapiei. 2025. “The Role of Corporate Governance on Corporate Tax Avoidance: A Developing Country Perspective.” Journal of Accounting in Emerging Economies 15(1):84–105. doi: 10.1108/JAEE-01-2023-0022.
Matinheikki, Juri, Katri Kauppi, Alistair Brandon–Jones, and Erik M. van Raaij. 2022. Making Agency Theory Work for Supply Chain Relationships: A Systematic Review across Four Disciplines. Vol. 42.
Minerba, Kementerian Energi dan Sumber Daya Mineral. 2025. “Laporan Kinerja DITJEN Minerba.” Direktorat Jendral Mineral Dan Batubara, 1–23.
Moses, Elaigwu, Ayoib Che-Ahmad, and Salau Olarinoye Abdulmalik. 2020. “Board Governance Mechanisms and Sustainability Reporting Quality: A Theoretical Framework.” Cogent Business and Management 7(1). doi: 10.1080/23311975.2020.1771075.
Otoritas Jasa Keuangan. 2014. Peraturaan Otoritas Jasa Keuangan Nomor 33/POJK.04/2014 Tentang Direksi Dan Dewan Komisaris Emiten Atau Perusahaan Publik.
Rashid, Md Harun Ur, Farhana Begum, Syed Zabid Hossain, and Jamaliah Said. 2024. “Does CSR Affect Tax Avoidance? Moderating Role of Political Connections in Bangladesh Banking Sector.” Social Responsibility Journal 20(4):719–39. doi: 10.1108/SRJ-09-2022-0364.
Roffia, Paolo, Virginia Simón-Moya, and Javier Sendra García. 2022. “Board of Director Attributes: Effects on Financial Performance in SMEs.” International Entrepreneurship and Management Journal 18(3):1141–72. doi: 10.1007/s11365-020-00715-5.
Salehi, Mahdi, Sahar Jabbari, Zeynab Nourbakhsh Hosseiny, and Fatemeh Eslami Khargh. 2024. “Impact of Corporate Governance on Tax Avoidance.” Journal of Public Affairs 24(3). doi: 10.1002/pa.2929.
Silvera, Dica Lady, Heriyani, and Sahara. 2024. “Tata Kelola Perusahaan Dan Tanggung Jawab Sosial Perusahaan: Tinjauan Atas Pengaruhnya Terhadap Penghindaran Pajak Dan Praktik Manajemen Laba.” Jurnal Akademi Akuntansi Indonesia Padang 4(1):35–53. doi: 10.31933/5dz3ke89.
Stanley, Nicklaus, and Luky Patricia Widianingsih. 2025. “Profitability Meets Responsibility?: The Role Of Board Gender Diversity In Shaping Corporate Tax Avoidance Behaviour.” 13(3):2847–60.
Sulistyawati, Anindia, and Aryani Intan Endah Rahmawati. 2024. “Determinants of Tax Avoidance: Gender Diversity, Capital Intensity, Audit Committee, and Board Size.” Ultima Accounting: Jurnal Ilmu Akuntansi 16(1):152–70.
Suripto. 2021. “Pengaruh Corporate Social Responsbility, Kualitas Audit Dan Manajemen Laba Terhadap Tax Avoidance Pada Perusahaan Pertambangan Yang Terdaftar Di Bursa Efek Indonesia.” JIMEA | Jurnal Ilmiah MEA (Manajemen, Ekonomi, Dan Akuntansi) 5(Vol 5 No 1 (2021): Edisi Januari-April 2021):1651–72.
Swandhana, Jeremy, and Eko Budi Santoso. 2023. “Pengaruh Profitabilitas Dan Solvabilitas Terhadap Penghindaran Pajak Sebelum Dan Saat Pandemi Covid-19.” Media Akuntansi Dan Perpajakan Indonesia 5(1):1–18. doi: 10.37715/mapi.v5i1.4167.
Thomas, Jon Ungoed. 2021. “Shell and BP Paid Zero Tax on North Sea Gas and Oil for Three Years.” The Guardian 1. Retrieved (https://www.theguardian.com/business/2021/oct/30/shell-and-bp-paid-zero-tax-on-north-sea-gas-and-oil-for-three-years).
Voice, Energy. 2021. “Shell Receives £76m Refund as Part of UK Government Tax Scheme.” Energy Voice 1. Retrieved (https://www.energyvoice.com/oilandgas/313228/shell-receives-76m-refund-as-part-of-uk-government-tax-scheme).
Yudistira, Ida Bagus Idyardha, Putu Wenny Saitri, and Ni Wayan Rustiarini. 2025. “Pengaruh Manajemen Laba, Good Corporate Governance, Dan Corporate Social Responsibility Terhadap Tax Avoidanc.”
Yusriva, Salma, and Ratri Paramitalaksmi. 2024. “The Influence of Btd, Roa, Leverage, Company Size and Deferred Tax on Tax Avoidance in the Financial Sector.” Global Financial Accounting Journal 08(1). doi: 10.53841/bpscpr.2016.31.1.67.
Bila bermanfaat silahkan share artikel ini
Berikan Komentar Anda terhadap artikel Unveiling Tax Avoidance: The Mediating Role of Sustainability Reporting Quality in Board Influence
ARTICLE HISTORY
How to Cite
Issue
Section
Copyright (c) 2026 Abraham Romamti Ezar, Luky Patricia Widianingsih
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under Creative Commons Attribution 4.0 International License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (Refer to The Effect of Open Access).
