Uncovering the impact of ownership types on tax aggressiveness in Indonesia

Abstract The purpose of this research is to empirically test and analyze the influence of ownership structure, including family ownership, management ownership, institutional ownership, state ownership, public ownership, foreign ownership, and concentrated ownership, on tax aggressiveness (ETR and CFETR). The ETR indicates a company’s behavior in reducing corporate taxes, while the CFETR denotes tax aggressiveness in terms of cash flow used to pay corporate taxes. These two measures can provide clues about whether a company is tax aggressive. This study is based on two theories—agency theory and socioemotional wealth theory. While agency theory is used to examine the impact of tax aggressiveness, socioemotional wealth theory examines the impact of family ownership on tax aggressiveness. This study employed a quantitative approach, using descriptive and inferential statistical analysis techniques to examine all companies listed on the Indonesia Stock Exchange (IDX) in 2023, yielding a total of 382 cross-sectional data units. The results of this study indicate that family ownership, management ownership, institutional ownership, state ownership, and foreign ownership have a significant effect, meaning that as the proportion of ownership increases, tax aggressiveness increases. In comparison, public ownership and concentrated ownership do not have a significant effect on tax aggressiveness. This study provides a new contribution to the capital market context in Indonesia, which comprehensively shows the types of ownership structures, namely family, managerial, institutional, state, public, foreign, and concentrated ownership, in relation to corporate aggressiveness. Future research should build on the results of this study to highlight the important role of shareholders in tax aggressiveness in Indonesia and other developing countries.