Article Title

ARE FINANCIAL INSTITUTIONS TAX AGGRESSIVE? EVIDENCE FROM CORPORATE TAX RETURN DATA

Authors

Subagio Efendi, Business School Ultimo NSW 2007, AustraliaFollow
Salim Darmadi, Business School Ultimo NSW 2007, AustraliaFollow
Robert Czernkowski, Business School, Ultimo NSW 2007, AustraliaFollow

Document Type

Article

Abstract

This study examines how financial firms’ tax aggressiveness differs from their peers in other sectors. Using confidential tax return data of the 5,968 largest Indonesian firms from 2009 to 2017, our study finds financial firms to have lower tax burdens relative to their non-financial counterparts, suggesting more opportunities for tax avoidance. Further, we document simultaneous use of tax shelters and temporary and permanent differences between accounting standards and tax laws, indicating a tendency to use the most sophisticated and less costly techniques in minimising tax burdens. These findings suggest tax aggressiveness may be one important unintended consequence of the government’s conventional prudential policy.

Recommended Citation

Efendi, Subagio; Darmadi, Salim; and Czernkowski, Robert (2022) "ARE FINANCIAL INSTITUTIONS TAX AGGRESSIVE? EVIDENCE FROM CORPORATE TAX RETURN DATA," Bulletin of Monetary Economics and Banking: Vol. 25: No. 2, Article 3.
DOI: https://doi.org/10.21098/bemp.v25i2.1825
Available at: https://bulletin.bmeb-bi.org/bmeb/vol25/iss2/3

First Page

173

Last Page

202