Does Corporate Governance Affect Tax Planning? A Case Study of a Manufacturing Company

Many studies pertain to the role of excellent corporate governance characteristics. Some of these characteristics are the presence of an independent commissioner (IDC), institutional ownership (IO) and leverage (LEV) at an effective tax rate. Therefore, the objective of this research is to examine the effect of the characteristics of corporate governance (CG) according to the factors mentioned. This working paper constitutes empirical research with data collection utilising the sampling method. Secondary data were obtained from privatised governmental financial statement listed on the Indonesia Stock Exchange (IDX) from 2011 to 2014. After multiple regression analyses, the results of this study showed that the proportion of IDCs had no effect on the effective tax rate (ETR). Meanwhile, institutional investors had no impact on effective tax rates, and leverage has a positive effect on the effective tax rate. Keywords: Corporate Governance, Effective Tax Rate, Tax Planning.