The Effect of CEO Attributes and Cognitive Abilities on Aggressive Tax Avoidance : The Case of Indonesian Energy Companies Listed on the IDX
Keywords:
Aggressive tax avoidance, CEO attributes, CEO cognitive abilityAbstract
This study aims to investigate the effect of CEO attributes and cognitive abilities on aggressive tax avoidance practices in companies. This study uses energy sector companies listed on the Indonesia Stock Exchange for the period 2018-2022 as the population and uses quantitative methods with a sample of 58 companies and observation data totaling 290 observations. This study uses multiple linear regression data analysis techniques. The results showed a significant relationship between age, tenure, accounting expertise, foreign CEOs, and CEOs from within the company. The findings show that the more the age of the CEO, the higher the value of the company's effective tax rate. CEO tenure does not affect the level of tax avoidance. If the CEO has financial expertise, there is a tendency for the company's effective tax rate to decrease. The presence of a foreign CEO will reduce the company's effective tax rate, which means that tax avoidance increases. Then the ineffectiveness of the foreign CEO variable can be caused by the tight monitoring of the company. These findings provide deep insight into the factors that influence corporate tax policy in the context of Indonesian firms with dualistic corporate governance. This study makes an important contribution to the understanding of the relationship between CEO cognitive ability, CEO attributes, and tax avoidance practices in Indonesian firms.
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