Macroeconomic Determinants of Tax Avoidance and the Moderating Role of Public Governance
Macroeconomic Determinants of Tax Avoidance and the Moderating Role of Public Governance

Summary/Abstract: Tax avoidance refers to the implementation of a strategy by companies aimed at lowering their tax responsibilities. This research explores the impact of macroeconomic variables, namely the statutory tax rate, inflation, and policy uncertainty. This study integrates public governance as a moderating variable. The research focuses on non-financial firms sampled from five ASEAN countries: Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. From the panel data regression analysis of 11,631 observations, it was found that the statutory tax rate, inflation, and policy uncertainty contribute to higher levels of corporate tax avoidance in five ASEAN countries. Moreover, the study shows that the presence of public governance moderates the relationship between corporate income tax rates, inflation, and policy uncertainty, thereby weakening corporate tax avoidance practices. The implications of this research are important for both companies and governments. For companies, the results suggest that policies should take into account both macroeconomic and institutional environments. For governments, strengthening institutional frameworks is essential to boosting tax revenue collection.

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