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The Impact of tax planning on firm value with corporate governance as moderating variable, empirical evidence: Indonesia

Tax planning is considered as one of the most significant activity by the company. Even though traditionally shareholder has viewed tax planning as an activity that gives benefit to firm value, this statement has been challenged. Information asymmetry may facilitate manager acting opportunistic and their interest may be not in line with shareholder interest: firm value improvement. According to Desai & Dharmapala (2009), good supervision can minimize this opportunistic behavior. Thus, corporate governance which represents good supervision may moderate the relationship between tax planning and firm value. This paper investigates the impact of tax planning on firm value with corporate governance as moderating variable. Univariate and multivariate analyses are used to examine this relationship. Tax planning is operationalized using two proxies which are; Current/Cash ETR-Based tax saving (CTS) and GAAP ETR-Based Tax Saving (GAAPTS), whereas firm value is measured by Return on Assets (ROA), Market to Book Ratio (MTB) and Price Earnings ratio (PER). Corporate governance is determined using an index which consists of several subquestions. Using Indonesian public companies as the sample, the multivariate result depicts that higher tax planning leads to higher ROA. This result holds for both models which use CTS and GAAPTS as tax planning proxy. Moreover, the finding also shows that corporate governance moderates this relationship. However, the result does not hold for the other models that use MTB and PER as the proxy of firm value. In addition, this research shows that there is no significant impact of tax planning on firm value and this relationship is not moderated by corporate governance, when all the models are investigated using univariate analysis.

Ketersediaan

Call NumberLocationAvailable
IA 0160PSB lt.dasar - Pascasarjana1
Penerbit Depok Universitas Indonesia.,
Edisi -
Subjek Corporate governance
Firm value
Tax planning
current ETR
GAAP ETR
ISBN/ISSN -
Klasifikasi -
Deskripsi Fisik x, 96 p. : ill. ; 29 cm.
Info Detail Spesifik -
Other Version/Related Tidak tersedia versi lain
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