Putri Nurmala, Trisna Dwi Febianti, Akhmad Sigit Adiwibowo

Business Strategy, Multinational Companies, Integrated Reporting, and Tax Avoidance

Introduction

Business strategy, multinational companies, integrated reporting, and tax avoidance. This study examines how business strategy, multinational companies, and integrated reporting affect tax avoidance in Indonesian firms (2017-2021). Corporate strategy significantly reduces tax avoidance.

Abstract

This research investigates the relationship between corporate strategy, multinational corporations, and integrated reporting on tax avoidance. A quantitative investigation depends on secondary data sources to collect its findings. This study's population consists of companies registered to trade on the Indonesia Stock Exchange between 2017 and 2021. The research was conducted in Indonesia. The research sample was obtained using an intended sampling approach, and as a result, the total number of companies in the sample was 90. This study found that multinational firms and integrated reporting had little impact on tax avoidance. It was revealed, however, that corporate strategy has a significant negative impact on tax avoidance. It is now uncommon to examine the impact of integrated reporting on tax avoidance, which is one of the reasons this study is so intriguing.

Review

This research paper examines the intricate relationships between corporate strategy, the presence of multinational corporations, and integrated reporting practices on the phenomenon of tax avoidance. Employing a quantitative methodology, the study draws upon secondary data from a sample of 90 companies listed on the Indonesia Stock Exchange between 2017 and 2021. The authors highlight the novelty of their work, particularly in exploring the impact of integrated reporting on tax avoidance, suggesting a timely contribution to a field where such investigations are reportedly uncommon. While the study addresses a highly relevant and complex area, certain methodological details in the abstract warrant further consideration. The use of a purposive sampling approach for a sample of 90 companies, while providing specific insights, might limit the broader generalizability of the findings across the entire Indonesian market. Moreover, the abstract states that multinational firms and integrated reporting had "little impact" on tax avoidance, which needs precise clarification regarding statistical significance or practical effect size. In contrast, the finding that corporate strategy has a significant negative impact on tax avoidance is intriguing, yet the abstract lacks detail on how "corporate strategy" was operationalized and measured, which is crucial for interpreting this key result and assessing its robustness. Despite these points, the study offers valuable insights, particularly concerning the role of corporate strategy in mitigating tax avoidance, which could have significant implications for corporate governance and regulatory frameworks in Indonesia. The exploration of integrated reporting's influence, even if initially indicating a limited direct impact, is a commendable step towards expanding the literature and may pave the way for future research into indirect pathways or moderating factors. Future iterations of this work could benefit from a more detailed elaboration of the variables, a broader sampling strategy, and perhaps a discussion of the specific contextual factors in Indonesia that might shape these observed relationships.

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