📄 Abstract
The self-assessment system used in Indonesia?s tax collection gives taxpayers the authority to calculate, pay, and report taxes on their own. This autonomy has unfortunately created a loophole for tax avoidance, allowing some taxpayers to legally minimize their tax payments and thus reducing state revenue. Against this backdrop, the present study examines how foreign ownership, audit committees, and financial distress influence corporate tax avoidance, and whether the character of executives (specifically their risk-taking propensity) moderates these effects. The study focuses on manufacturing firms in the consumer goods sector listed on the Indonesia Stock Exchange (IDX) for the period 2021?2023. A purposive sampling approach yielded 99 firm-year observations after removing outliers. We employed panel data regression and Moderated Regression Analysis (MRA) using EViews 13. The results show that higher foreign ownership and greater financial distress are each associated with significantly lower tax avoidance, while the audit committee?s financial expertise has no significant effect. Furthermore, an executive?s character moderates the influence of foreign ownership on tax avoidance ? a risk-averse executive strengthens the negative effect of foreign ownership ? but executive character does not significantly moderate the effects of the audit committee or financial distress on tax avoidance. These findings suggest that strong external ownership oversight and financial pressures can curb tax avoidance, especially when paired with cautious leadership, whereas internal governance alone (audit committees) may not suffice.
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📚 How to Cite:
Mutiah, Putri Renalita Sutra Tanjung , THE INFLUENCE OF FOREIGN OWNERSHIP, AUDIT COMMITTEE, AND FINANCIAL DISTRESS ON TAX AVOIDANCE: THE MODERATING ROLE OF EXECUTIVE CHARACTER , Volume 12 , Issue 6, june 2025, EPRA International Journal of Economics, Business and Management Studies (EBMS) , DOI: https://doi.org/10.36713/epra22467