Tax Avoidance Practices in ASEAN Countries: Effect of Environmental, Social, and Governance, and Capital Intensity

The purpose of this study is to investigate the environmental, social, and governance (ESG) and capital intensity (CI) factors that affect tax avoidance (TA). The 3,634 non-financial companies in ASEAN countries are the research population. The research sample is 87 companies. Panel data multiple regression is the analysis method employed. The results showed ESG has a positive and significant and CI has a negative and significant to TA. CI and ESG initiatives are intended to improve legitimacy and streamline business processes. There is a substantial difference in TA between the pandemic and the non-pandemic period. The Philippines is a country with a tendency to be more tax-compliant, resulting in a lower level of TA practices. As the tax authority, the government must always keep an eye on how businesses are acting in relation to ESG and their investments in assets to make sure these activities aren't being used as a cover for TA.