POLITICAL CONNECTION AND TAX AGGRESSIVENESS: A STUDY ON THE STATE-OWNED ENTERPRISES REGISTERED IN INDONESIA STOCK EXCHANGE
POLITICAL CONNECTION AND TAX AGGRESSIVENESS: A STUDY ON THE STATE-OWNED ENTERPRISES REGISTERED IN INDONESIA STOCK EXCHANGE

Summary/Abstract: This study aims to analyze the effect of political connection in the board of directors and board of commissioners on tax aggressiveness in the State-Owned Enterprises listed in Indonesia Stock Exchange. The analysis results show that the political connection between the board of directors and the board of commissioners negatively affects tax aggressiveness. It indicates that state-owned enterprises tend to avert tax aggressiveness. The state-owned enterprises which have political connection incline toward the compliance with the prevailing taxation regulation to enhance their image as obedient taxpayers. Although there is a political connection established with the government and parliament, the board of directors and board of commissioners do not take it into their own advantages regarding taxation. That indicates how state-owned enterprises tend to uphold government’s work plan in relation with tax revenue. Furthermore, the finding of this research signals the effectiveness of monitoring by the independent commissioner in order to synchronize the interest of the board of directors and the board of commissioner in terms of taxation for the long-term objectives of the company.

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