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American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 39
American Journal of Humanities and Social Sciences Research (AJHSSR)
e-ISSN :2378-703X
Volume-07, Issue-02, pp-39-44
www.ajhssr.com
Research Paper Open Access
Tax Avoidance in Perspective of Institutional Ownership,
Independent Commissioners and AuditCommittees
Muhammad Farkhan Fadhilah Sandy1
, Sekar Mayangsari2*
1
Master Accounting, Universitas Trisakti, Indonesia
2
Master Accounting, Universitas Trisakti, Indonesia
*Corresponding Author: sekar_mayangsari@trisakti.ac.id
ABSTRACT : This study aims to obtain empirical evidence regarding the effect of institutional ownership,
independent commissioners, and audit committees on tax avoidance. This research is focused on the Property
and Real Estate Industry listed on the Indonesia Stock Exchange in 2019-2021. The observations in this study
were 141 samples. Research obtained by purposive sampling technique method. The technique used in this
research is multiple linear regression analysis. The results of this analysis show that the proportion of
independent commissioners has an effect on tax avoidance, but institutional ownership, and the audit committee
have no effect on tax avoidance.
KEYWORDS : Institutional Ownership, Independence Commissioner, Audit Committee, Tax Avoidance
I. INTRODUCTION
Based on data from the Directorate General of Taxes (DGT) performance report, it can be seen related
to the target data and realization of state tax revenue throughout 2016-2020. This tax revenue is obtained from
various sources of revenue, such as income tax, value added tax, land and building tax, and many other sourcesof
tax revenue.
TABLE 1.1
Indonesia's Tax Revenue Realization
Year Target Realization Performance
2016 1.355,20 1.105,73 81,59%
2017 1.283,57 1.151,03 89,67%
2018 1.424,00 1.315,51 92,38%
2019 1.577,56 1.332,06 84,44%
2020 1.198,82 1.069,98 89,25%
Source: Directorate General of Taxes Performance Report (in billion rupiah).
Tax revenue from 2016-2020 has increased and decreased. However, the realization of revenue is still
not in accordance with the predetermined target. This illustrates that the level of public compliance is still low in
paying taxes, which is proven by the existence of tax evasion and tax avoidance practices. Tax avoidance is a
legal activity carried out by taxpayers (WP) to minimize the tax burden by taking advantage of weaknesses in
tax provisions (Kirana & Sundari, 2022). In recent years, cases regarding tax avoidance have become a hot
issue, where several companies have been revealed to the media. Cases that avoid tax avoidance have been
carried out by well-known companies such as PT Adaro Energy, PT Bentoel Internasional Investama and other
cases.
The government provides facilities in the field of taxation such as a reduction in the corporate tax rate
stipulated in Law No. 36 of 2008 article 17 paragraph (1) letter b, where the domestic corporate tax rate and
permanent establishment is 28 percent. Subsequently, this rate was revised to 25 percent which came into effect
in 2010. Not only through a reduction in tax rates, the government also simplified the tax calculation andis listed
in PP No. 46 of 2013 which contains, simplification of tax calculations where entities that have a gross
circulation of less than IDR 4.8 billion in one year, a rate of 1 percent is applied, not only that, the government
American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 40
also implemented a tax amnesty system. Although the government has implemented various systems so that the
target realization of state tax revenue is achieved, there are still many taxpayers who apply aggressive tax
strategies in order to reduce the cost of taxes to be paid, such as one of them is the practice of tax avoidance.
There are several reasons for a company to pay taxes, one of which is the governance of a company or
Corporate Governance (Martha & Jati, 2021). Corporate governance can be seen from various aspects, such as
institutional ownership, the proportion of independent commissioners, and the audit committee. Corporate
governance not only has the potential to increase tax avoidance, making the company more profitable, but also
limit tax avoidance to a level where the risks do not outweigh the benefits (Kovermann & Velte, 2019).
II. CONCEPTUAL MODEL AND HYPOTHESIS
Agency Theory
According to Jensen and Meckling (1976) agency theory can explain how the parties involved in the company
will act, because basically they have different interests. Differences in interests give rise to agency conflicts that
occur due to the separation between ownership and control of the company. Therefore, the owner needs a
supervisory mechanism so that the manager as an agent can carry out his duties properly (Arinda
& Dwimulyani,2018).
Tax Avoidance
Tax avoidance is a legal activity carried out by taxpayers (WP) to minimize the tax burden by taking advantage
of weaknesses in tax provisions (Kirana & Sundari, 2022).
Institutional Ownership
Institutional ownership is share ownership by an industry that can consist of institutions or institutions such as
banks, the investment industry, the insurance industry, pension funds and other institutional ownership
(Widaryanti, 2022). Institutional institutional ownership is anticipated to strengthen the supervision of agents in
carrying out company business activities to reduce the opportunistic behavior of company directors (Novika,
2022). Research conducted by (Novika, 2022) states that institutional ownership has a negative influence on tax
avoidance. On the basis of theory and research results by previous researchers, the following hypothesis can be
drawn.
H1 : Institutional ownership has a negative influence on tax avoidance.
Independent Board of Commissioners
The independent board of commissioners as a corporate governance device is tasked with ensuring thatcorporate
principles and governance are properly implemented. Independent commissioners also act as mediators between
entity management and entity owners when making policies to prevent violations of the law, including in
determining tax payment tips. Because independent commissioners have an obligation to the interests of
shareholders, independent commissioners strive to be obedient in paying taxes and avoiding tax avoidance
(Martha & Jati, 2021). Research by Martha & Jati (2021), Prasetyo, et al. (2021) stated that the proportion of
independent commissioners has a negative influence on tax avoidance. In accordance with the theory and results
of previous research, the following hypothesis can be drawn.
H2: The proportion of independent commissioners has a negative influence on tax avoidance.
Audit Committee
The audit committee functions as a supervisor of the process of making financial reports and internal
supervision. The role of the audit committee also affects corporate governance, where the existence of the audit
committee participates in supporting the performance of the board of commissioners, where the audit committee
has the authority to avoid actions that are not in accordance with the rules relating to the financialstatements of a
company, one of which is tax avoidance (Martha & Jati, 2021). The IDX requires all issuers to form and have an
audit committee chaired by an independent commissioner (Kirana & Sundari, 2022).
Based on Bank Indonesia Regulation No. 8/14/PBI/2006 concerning the implementation of good corporate
governance, the number of audit committee members is at least 3 people, who are appointed and dismissed and
are responsible to the board of commissioners. Research by Martha & Jati (2021), Eksandy (2017), concluded
that the audit committee has a negative influence on tax avoidance. On the basis of theory and theresults of
previous research, the following hypothesis can be drawn.
H3: Audit Committee negatively influence on tax avoidance
American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 41
Audit Committee
Tax Avoidance
Independent Commissioner
Institutional Ownership
Figure 1. Conceptual Framework
III. RESEARCH METHODES
This study uses secondary data by selecting data sources from Property & Real Estate entities that are
listed on the IDX in 2019-2021 and publish financial reports and annual reports, by opening the IDX website
(www.idx.co.id). The quantitative data of this study are income tax expense, profit before tax, total institutional
shares, total outstanding shares, number of independent commissioners, and number of audit committees in the
financial statements or annual reports of Property & Real Estate entities. The objects in this study are listed
companies in Indonesia Stock Exchange. The variables are tax avoidance represented by the value of Effective
Tax Rates (ETR), Institutional Ownership, Proportion of Independent Commissioners, and Audit Committee.
The samples are property & Real Estate entities which are listed on the Indonesia Stock Exchange. Observation
period is 2019-2021. All samples should never been delisted during observation period.
Operational Definition
Tax Avoidance (TAX) = Income Tax Expense/Earning Before TaxINST = Institutional Ownership/Outstanding
Share
INDP= Independence Commissioners/ Total Commissioner Member ×100%AUDIT = Number of Audit
Committee
We usu multiple regression to test the hypothesis. The equation is shown below:
TAX = α + β1INST + β2INDP+ β3AUDIT + ε
Where :
TAX = Tax Avoidance
OWN = Institutional Ownership
INDP = Independence Commissioners ProportionalAUDIT = Audit Committee
α = Constanta
β1 – β3 = Coefficientε = Error
IV. RESULTS AND DISCUSSIONS
The results of descriptive statistics provide an overview or description of data seen from the lowest, highest,
mean, and standard deviation values. The results of descriptive statistics are presented in Table 2, below.
Table 2. Descriptive Statistical Test Results
Variables N Minimum Maximum Mean Std. Deviation
OWN 141 0.03 1.86 0.6198 0.2507
INDP 141 .00 1.52 .3415 .21249
AUDIT 141 .00 4.00 2.8794 .75095
TAX 141 .00 1.16 .0946 .16608
According to the descriptive statistical test results in Table 2, the tax avoidance variable represented by ETR
(Effective Tax Rate) in mining entities listed on the IDX shows that of the 141 observation samples, the lowest
value of tax avoidance is 0.000 and the highest value of tax avoidance is 1.16. The standard deviation value of
the tax avoidance variable of 0.16608 means that the standard deviation of the data from the mean value is
0.16608.
Institutional Ownership proxied by KI in Table 2, out of 141 observation samples, the lowest value of
Institutional ownership is 0.03 and the highest value of Institutional ownership is 1.86. The standard deviation
value of the Institutional ownership variable of 0.25017 means that the standard deviation of the data from the
American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 42
mean value is 0.25017.
The proportion of the independent board of commissioners represented by PDKI in Table 2, out of 141
observation samples, the lowest value of the proportion of the independent board of commissioners is
0.00. Meanwhile, the highest value of the proportion of the board of independent commissioners is 1.52. The
standard deviation value of the variable proportion of the independent board of commissioners is 0.21249,
meaning that the standard deviation of the data on the average value is 0.21249.
The audit committee proxied by KA in Table 2, out of 141 observation samples, the lowest value of theaudit
committee is 0.00 and the highest value of the audit committee is 4. The average value of the audit committee is
2.8794. The standard deviation value of the audit committee variable is 0.75095, meaning that the standard
deviation of the data from the mean value is 0.75095.
Normality Test Results
The results in the histogram normality test produce a mountainous curve shape, so it can be said that thepattern
is normally distributed.
Multicollinearity Test
Table 4. Multicollinearity Test Results
Model Collinearity Statistics
Tolerance VIF
1 Constanta
OWN .980 1.021
INDP .950 1.053
AUDIT .969 1.032
Based on the multicollinearity test results in Table 4, it shows that the independent variables in this study,
namely institutional ownership, the proportion of independent commissioners, and the audit committee,have a
tolerance value> 0.10 or a VIF value <10, this means that the independent variables in this study are free from
multicollinearity symptoms.
Heteroscedasity Results
American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 43
The results of the Heteroscedacity Test Scatterplot graph show that the points spread randomly and are spread
both above and below the number 0 on the Y axis. This means that there is no heteroscedacity in the regression
model so that the regression model is suitable for use.
Auto-correlation Test
Aims to test whether in the linear regression model there is a correlation between confounding error in period1
and confounding error in period t-1 (Prior period).
Table 5. Auto-Correlation Test Results
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
Durbin-Watson
1 .242a .058 .038.16291 2.015
a. Predictors: Constanta, OWN, INDP, AUDIT
b. Dependent Variable: Tax Avoidance
Table 6. Results
Variables Prediction Coefficients t-test p-value Conclusion
Constanta 0.048 0.711 0.478
OWN + -0.072 -1.304 0.194 H1 Not significant
INDP + 0.139 2.086 0.039 H2 Significant
AUDIT + 0.015 0.826 0.410 H3 Not significant
Dependent Variable: Tax Avoidance
The first hypothesis of the study reads that institutional ownership has a negative influence on tax avoidance.
According to Table 7, the test results obtained the regression coefficient value is -0.072, the significance valueis
0.194. Where institutional ownership in property & real estate companies listed on the IDX for the period 2019 -
2021 has no effect on ETR, which means it has no influence on tax avoidance activities, so the hypothesis is
rejected.
The second hypothesis of this study reads, the proportion of independent commissioners has a negative
influence on tax avoidance. According to Table 7, the regression coefficient value is 0.139, the significance
value is 0.039. The level of the proportion of independent commissioners in property & real estate entities onthe
IDX in the 2019-2021 period has a positive effect on ETR which determines the onset of tax avoidance
activities by the company. Independent commissioners are able to supervise the management of an entity so that
it complies with current regulations, so they are able to minimize the possibility of implementing tax avoidance
activities.
The third hypothesis of this study reads, the audit committee has a negative influence on tax avoidance.
According to Table 7, the test results obtained a regression coefficient value of 0.015 and a significance value of
0.410. Where the number of audit committees in property & real estate companies listed on the IDX for the
period 2019 - 2021 has no effect on tax avoidance (ETR), so the hypothesis is rejected. Other parties have a
greater function in making decisions than the audit committee, even though the audit committee comes from
external parties. Apart from its insufficient function, the absence of influence between the audit committee and
tax avoidance can also be caused by the inability of the independent audit committee to carry out the task of
monitoring the internal control structure of an entity and also monitoring the evaluation process carried out by
internal auditors properly, as a result, tax avoidance activities by certain parties cannot be tracked by the audit
committee.
V. CONCLUSION
According to the results of the study, it can be concluded that the level of institutional ownership has
no influence on tax avoidance, this is because Institutional parties do not have sufficient rights in making
decisions. The proportion of independent commissioners has a positive effect on tax avoidance, this is due to the
presence of independent commissioners in the company can closely monitor a management, as a result it isable
to reduce dysfunctional actions that may arise, for example tax avoidance. The number of audit committees has
no effect on tax avoidance, this is because other parties have a greater function to make decisions, compared to
the company's audit committee even though the audit committee is an external party to the company and the
American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
A J H S S R J o u r n a l P a g e | 44
inability of the independent audit committee to carry out its work to oversee the internal control structure. For
future researchers who want to prove the influence of managerial ownership, the proportion of independent
commissioners, and the audit committee on tax avoidance practices, it is hoped thatthey can use other variables
that are thought to influence tax avoidance practices that proxy good corporate governance such as institutional
ownership. Then, future researchers are also expected to widen the range of research, namely examining other
than mining entities, for example in banking companies, manufacturing companies, and other sectors.
REFERENCES
[1]. Kirana, & Sundari. (2022). CORPORATE GOVERNANCE MECHANISMS AND CORPORATE
SOCIALRESPONSIBILITY ON TAX AVOIDANCE IN COAL MINING SECTOR COMPANIES.
Journal of
[2]. Management and Bussines (JOMB), 4(JULI-DESEMBER 2022), 742–756.
https://doi.org/10.31539/jomb.v4i2.4265
[3]. Kovermann, J., & Velte, P. (2019). The impact of corporate governance on corporate tax avoidance—A
literature review. Journal of International Accounting, Auditing and Taxation, 36, 100270.
https://doi.org/10.1016/j.intaccaudtax.2019.100270
[4]. Martha, I. D. A. A. M. M., & Jati, I. K. (2021). Managerial Ownership, Proportion of Independent
Commissioners, Audit Committee and Tax Avoidance. E-Jurnal Akuntansi, 31(9), 2265.
https://doi.org/10.24843/eja.2021.v31.i09.p09
[5]. Novika. (2022). The Effect Of Corporate Social Responsibility, Family Ownership And Institutional
OwnershipOn Tax Avoidance With Business Strategy As A Moderating Variable. 2(2), 1483–1494.
[6]. Widaryanti. (2022). Analysis of the Effect of Institutional Ownership, Independent Commissioners,
Leverage, Company Size and Profitability on Tax Avoidance. Jurnal Ilmiah Fokus Ekonomi,
Manajemen, Bisnis Dan Akuntansi, 01(01), 1–9.

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Tax Avoidance in Perspective of Institutional Ownership, Independent Commissioners and AuditCommittees

  • 1. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 39 American Journal of Humanities and Social Sciences Research (AJHSSR) e-ISSN :2378-703X Volume-07, Issue-02, pp-39-44 www.ajhssr.com Research Paper Open Access Tax Avoidance in Perspective of Institutional Ownership, Independent Commissioners and AuditCommittees Muhammad Farkhan Fadhilah Sandy1 , Sekar Mayangsari2* 1 Master Accounting, Universitas Trisakti, Indonesia 2 Master Accounting, Universitas Trisakti, Indonesia *Corresponding Author: sekar_mayangsari@trisakti.ac.id ABSTRACT : This study aims to obtain empirical evidence regarding the effect of institutional ownership, independent commissioners, and audit committees on tax avoidance. This research is focused on the Property and Real Estate Industry listed on the Indonesia Stock Exchange in 2019-2021. The observations in this study were 141 samples. Research obtained by purposive sampling technique method. The technique used in this research is multiple linear regression analysis. The results of this analysis show that the proportion of independent commissioners has an effect on tax avoidance, but institutional ownership, and the audit committee have no effect on tax avoidance. KEYWORDS : Institutional Ownership, Independence Commissioner, Audit Committee, Tax Avoidance I. INTRODUCTION Based on data from the Directorate General of Taxes (DGT) performance report, it can be seen related to the target data and realization of state tax revenue throughout 2016-2020. This tax revenue is obtained from various sources of revenue, such as income tax, value added tax, land and building tax, and many other sourcesof tax revenue. TABLE 1.1 Indonesia's Tax Revenue Realization Year Target Realization Performance 2016 1.355,20 1.105,73 81,59% 2017 1.283,57 1.151,03 89,67% 2018 1.424,00 1.315,51 92,38% 2019 1.577,56 1.332,06 84,44% 2020 1.198,82 1.069,98 89,25% Source: Directorate General of Taxes Performance Report (in billion rupiah). Tax revenue from 2016-2020 has increased and decreased. However, the realization of revenue is still not in accordance with the predetermined target. This illustrates that the level of public compliance is still low in paying taxes, which is proven by the existence of tax evasion and tax avoidance practices. Tax avoidance is a legal activity carried out by taxpayers (WP) to minimize the tax burden by taking advantage of weaknesses in tax provisions (Kirana & Sundari, 2022). In recent years, cases regarding tax avoidance have become a hot issue, where several companies have been revealed to the media. Cases that avoid tax avoidance have been carried out by well-known companies such as PT Adaro Energy, PT Bentoel Internasional Investama and other cases. The government provides facilities in the field of taxation such as a reduction in the corporate tax rate stipulated in Law No. 36 of 2008 article 17 paragraph (1) letter b, where the domestic corporate tax rate and permanent establishment is 28 percent. Subsequently, this rate was revised to 25 percent which came into effect in 2010. Not only through a reduction in tax rates, the government also simplified the tax calculation andis listed in PP No. 46 of 2013 which contains, simplification of tax calculations where entities that have a gross circulation of less than IDR 4.8 billion in one year, a rate of 1 percent is applied, not only that, the government
  • 2. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 40 also implemented a tax amnesty system. Although the government has implemented various systems so that the target realization of state tax revenue is achieved, there are still many taxpayers who apply aggressive tax strategies in order to reduce the cost of taxes to be paid, such as one of them is the practice of tax avoidance. There are several reasons for a company to pay taxes, one of which is the governance of a company or Corporate Governance (Martha & Jati, 2021). Corporate governance can be seen from various aspects, such as institutional ownership, the proportion of independent commissioners, and the audit committee. Corporate governance not only has the potential to increase tax avoidance, making the company more profitable, but also limit tax avoidance to a level where the risks do not outweigh the benefits (Kovermann & Velte, 2019). II. CONCEPTUAL MODEL AND HYPOTHESIS Agency Theory According to Jensen and Meckling (1976) agency theory can explain how the parties involved in the company will act, because basically they have different interests. Differences in interests give rise to agency conflicts that occur due to the separation between ownership and control of the company. Therefore, the owner needs a supervisory mechanism so that the manager as an agent can carry out his duties properly (Arinda & Dwimulyani,2018). Tax Avoidance Tax avoidance is a legal activity carried out by taxpayers (WP) to minimize the tax burden by taking advantage of weaknesses in tax provisions (Kirana & Sundari, 2022). Institutional Ownership Institutional ownership is share ownership by an industry that can consist of institutions or institutions such as banks, the investment industry, the insurance industry, pension funds and other institutional ownership (Widaryanti, 2022). Institutional institutional ownership is anticipated to strengthen the supervision of agents in carrying out company business activities to reduce the opportunistic behavior of company directors (Novika, 2022). Research conducted by (Novika, 2022) states that institutional ownership has a negative influence on tax avoidance. On the basis of theory and research results by previous researchers, the following hypothesis can be drawn. H1 : Institutional ownership has a negative influence on tax avoidance. Independent Board of Commissioners The independent board of commissioners as a corporate governance device is tasked with ensuring thatcorporate principles and governance are properly implemented. Independent commissioners also act as mediators between entity management and entity owners when making policies to prevent violations of the law, including in determining tax payment tips. Because independent commissioners have an obligation to the interests of shareholders, independent commissioners strive to be obedient in paying taxes and avoiding tax avoidance (Martha & Jati, 2021). Research by Martha & Jati (2021), Prasetyo, et al. (2021) stated that the proportion of independent commissioners has a negative influence on tax avoidance. In accordance with the theory and results of previous research, the following hypothesis can be drawn. H2: The proportion of independent commissioners has a negative influence on tax avoidance. Audit Committee The audit committee functions as a supervisor of the process of making financial reports and internal supervision. The role of the audit committee also affects corporate governance, where the existence of the audit committee participates in supporting the performance of the board of commissioners, where the audit committee has the authority to avoid actions that are not in accordance with the rules relating to the financialstatements of a company, one of which is tax avoidance (Martha & Jati, 2021). The IDX requires all issuers to form and have an audit committee chaired by an independent commissioner (Kirana & Sundari, 2022). Based on Bank Indonesia Regulation No. 8/14/PBI/2006 concerning the implementation of good corporate governance, the number of audit committee members is at least 3 people, who are appointed and dismissed and are responsible to the board of commissioners. Research by Martha & Jati (2021), Eksandy (2017), concluded that the audit committee has a negative influence on tax avoidance. On the basis of theory and theresults of previous research, the following hypothesis can be drawn. H3: Audit Committee negatively influence on tax avoidance
  • 3. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 41 Audit Committee Tax Avoidance Independent Commissioner Institutional Ownership Figure 1. Conceptual Framework III. RESEARCH METHODES This study uses secondary data by selecting data sources from Property & Real Estate entities that are listed on the IDX in 2019-2021 and publish financial reports and annual reports, by opening the IDX website (www.idx.co.id). The quantitative data of this study are income tax expense, profit before tax, total institutional shares, total outstanding shares, number of independent commissioners, and number of audit committees in the financial statements or annual reports of Property & Real Estate entities. The objects in this study are listed companies in Indonesia Stock Exchange. The variables are tax avoidance represented by the value of Effective Tax Rates (ETR), Institutional Ownership, Proportion of Independent Commissioners, and Audit Committee. The samples are property & Real Estate entities which are listed on the Indonesia Stock Exchange. Observation period is 2019-2021. All samples should never been delisted during observation period. Operational Definition Tax Avoidance (TAX) = Income Tax Expense/Earning Before TaxINST = Institutional Ownership/Outstanding Share INDP= Independence Commissioners/ Total Commissioner Member ×100%AUDIT = Number of Audit Committee We usu multiple regression to test the hypothesis. The equation is shown below: TAX = α + β1INST + β2INDP+ β3AUDIT + ε Where : TAX = Tax Avoidance OWN = Institutional Ownership INDP = Independence Commissioners ProportionalAUDIT = Audit Committee α = Constanta β1 – β3 = Coefficientε = Error IV. RESULTS AND DISCUSSIONS The results of descriptive statistics provide an overview or description of data seen from the lowest, highest, mean, and standard deviation values. The results of descriptive statistics are presented in Table 2, below. Table 2. Descriptive Statistical Test Results Variables N Minimum Maximum Mean Std. Deviation OWN 141 0.03 1.86 0.6198 0.2507 INDP 141 .00 1.52 .3415 .21249 AUDIT 141 .00 4.00 2.8794 .75095 TAX 141 .00 1.16 .0946 .16608 According to the descriptive statistical test results in Table 2, the tax avoidance variable represented by ETR (Effective Tax Rate) in mining entities listed on the IDX shows that of the 141 observation samples, the lowest value of tax avoidance is 0.000 and the highest value of tax avoidance is 1.16. The standard deviation value of the tax avoidance variable of 0.16608 means that the standard deviation of the data from the mean value is 0.16608. Institutional Ownership proxied by KI in Table 2, out of 141 observation samples, the lowest value of Institutional ownership is 0.03 and the highest value of Institutional ownership is 1.86. The standard deviation value of the Institutional ownership variable of 0.25017 means that the standard deviation of the data from the
  • 4. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 42 mean value is 0.25017. The proportion of the independent board of commissioners represented by PDKI in Table 2, out of 141 observation samples, the lowest value of the proportion of the independent board of commissioners is 0.00. Meanwhile, the highest value of the proportion of the board of independent commissioners is 1.52. The standard deviation value of the variable proportion of the independent board of commissioners is 0.21249, meaning that the standard deviation of the data on the average value is 0.21249. The audit committee proxied by KA in Table 2, out of 141 observation samples, the lowest value of theaudit committee is 0.00 and the highest value of the audit committee is 4. The average value of the audit committee is 2.8794. The standard deviation value of the audit committee variable is 0.75095, meaning that the standard deviation of the data from the mean value is 0.75095. Normality Test Results The results in the histogram normality test produce a mountainous curve shape, so it can be said that thepattern is normally distributed. Multicollinearity Test Table 4. Multicollinearity Test Results Model Collinearity Statistics Tolerance VIF 1 Constanta OWN .980 1.021 INDP .950 1.053 AUDIT .969 1.032 Based on the multicollinearity test results in Table 4, it shows that the independent variables in this study, namely institutional ownership, the proportion of independent commissioners, and the audit committee,have a tolerance value> 0.10 or a VIF value <10, this means that the independent variables in this study are free from multicollinearity symptoms. Heteroscedasity Results
  • 5. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 43 The results of the Heteroscedacity Test Scatterplot graph show that the points spread randomly and are spread both above and below the number 0 on the Y axis. This means that there is no heteroscedacity in the regression model so that the regression model is suitable for use. Auto-correlation Test Aims to test whether in the linear regression model there is a correlation between confounding error in period1 and confounding error in period t-1 (Prior period). Table 5. Auto-Correlation Test Results Model R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson 1 .242a .058 .038.16291 2.015 a. Predictors: Constanta, OWN, INDP, AUDIT b. Dependent Variable: Tax Avoidance Table 6. Results Variables Prediction Coefficients t-test p-value Conclusion Constanta 0.048 0.711 0.478 OWN + -0.072 -1.304 0.194 H1 Not significant INDP + 0.139 2.086 0.039 H2 Significant AUDIT + 0.015 0.826 0.410 H3 Not significant Dependent Variable: Tax Avoidance The first hypothesis of the study reads that institutional ownership has a negative influence on tax avoidance. According to Table 7, the test results obtained the regression coefficient value is -0.072, the significance valueis 0.194. Where institutional ownership in property & real estate companies listed on the IDX for the period 2019 - 2021 has no effect on ETR, which means it has no influence on tax avoidance activities, so the hypothesis is rejected. The second hypothesis of this study reads, the proportion of independent commissioners has a negative influence on tax avoidance. According to Table 7, the regression coefficient value is 0.139, the significance value is 0.039. The level of the proportion of independent commissioners in property & real estate entities onthe IDX in the 2019-2021 period has a positive effect on ETR which determines the onset of tax avoidance activities by the company. Independent commissioners are able to supervise the management of an entity so that it complies with current regulations, so they are able to minimize the possibility of implementing tax avoidance activities. The third hypothesis of this study reads, the audit committee has a negative influence on tax avoidance. According to Table 7, the test results obtained a regression coefficient value of 0.015 and a significance value of 0.410. Where the number of audit committees in property & real estate companies listed on the IDX for the period 2019 - 2021 has no effect on tax avoidance (ETR), so the hypothesis is rejected. Other parties have a greater function in making decisions than the audit committee, even though the audit committee comes from external parties. Apart from its insufficient function, the absence of influence between the audit committee and tax avoidance can also be caused by the inability of the independent audit committee to carry out the task of monitoring the internal control structure of an entity and also monitoring the evaluation process carried out by internal auditors properly, as a result, tax avoidance activities by certain parties cannot be tracked by the audit committee. V. CONCLUSION According to the results of the study, it can be concluded that the level of institutional ownership has no influence on tax avoidance, this is because Institutional parties do not have sufficient rights in making decisions. The proportion of independent commissioners has a positive effect on tax avoidance, this is due to the presence of independent commissioners in the company can closely monitor a management, as a result it isable to reduce dysfunctional actions that may arise, for example tax avoidance. The number of audit committees has no effect on tax avoidance, this is because other parties have a greater function to make decisions, compared to the company's audit committee even though the audit committee is an external party to the company and the
  • 6. American Journal of Humanities and Social Sciences Research (AJHSSR) 2023 A J H S S R J o u r n a l P a g e | 44 inability of the independent audit committee to carry out its work to oversee the internal control structure. For future researchers who want to prove the influence of managerial ownership, the proportion of independent commissioners, and the audit committee on tax avoidance practices, it is hoped thatthey can use other variables that are thought to influence tax avoidance practices that proxy good corporate governance such as institutional ownership. Then, future researchers are also expected to widen the range of research, namely examining other than mining entities, for example in banking companies, manufacturing companies, and other sectors. REFERENCES [1]. Kirana, & Sundari. (2022). CORPORATE GOVERNANCE MECHANISMS AND CORPORATE SOCIALRESPONSIBILITY ON TAX AVOIDANCE IN COAL MINING SECTOR COMPANIES. Journal of [2]. Management and Bussines (JOMB), 4(JULI-DESEMBER 2022), 742–756. https://doi.org/10.31539/jomb.v4i2.4265 [3]. Kovermann, J., & Velte, P. (2019). The impact of corporate governance on corporate tax avoidance—A literature review. Journal of International Accounting, Auditing and Taxation, 36, 100270. https://doi.org/10.1016/j.intaccaudtax.2019.100270 [4]. Martha, I. D. A. A. M. M., & Jati, I. K. (2021). Managerial Ownership, Proportion of Independent Commissioners, Audit Committee and Tax Avoidance. E-Jurnal Akuntansi, 31(9), 2265. https://doi.org/10.24843/eja.2021.v31.i09.p09 [5]. Novika. (2022). The Effect Of Corporate Social Responsibility, Family Ownership And Institutional OwnershipOn Tax Avoidance With Business Strategy As A Moderating Variable. 2(2), 1483–1494. [6]. Widaryanti. (2022). Analysis of the Effect of Institutional Ownership, Independent Commissioners, Leverage, Company Size and Profitability on Tax Avoidance. Jurnal Ilmiah Fokus Ekonomi, Manajemen, Bisnis Dan Akuntansi, 01(01), 1–9.