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Abstract
This study aims to examine the effect of financial distress on tax avoidance and the moderating role of Environmental, Social, and Governance (ESG) in non-financial companies listed on the Indonesia Stock Exchange during the 2019-2023 period. Tax avoidance is measured using the Current Effective Tax Rate (CETR), financial distress is proxied by the Altman Z-score, and ESG is measured using Bloomberg ESG Disclosure Scores. This study applies a quantitative approach using panel data regression and firm size as a control variable. The results show that financial distress has a positive and significant effect on tax avoidance, indicating that financially pressured firms tend to reduce tax burdens to preserve cash flow. However, ESG does not significantly moderate this relationship, although the interaction coefficient is negative as theoretically expected. This study contributes to the literature by integrating financial risk, governance, and sustainability perspectives in the context of post-pandemic corporate behavior in emerging markets.
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References
- Akmalia, A. (2020). Pengaruh struktur modal, struktur aset dan profitabilitas terhadap potensi terjadinya financial distress perusahaan. Business Management Analysis Journal (BMAJ), 3(1), 1–21.
- Elamer, A. A., Ntim, C. G., Abdou, H. A., Zalata, A. M., & Elmagrhi, M. H. (2024). Does ESG performance influence corporate tax avoidance? Evidence from global firms. Journal of International Accounting, Auditing and Taxation, 54, 100547.
- Kalbuana, N., Susanti, H., & Rahmawati, R. (2023). Financial distress prediction and its determinant in Indonesia’s capital market. International Journal of Financial Research, 14(2), 23–36.
- Kamayanti, A., Kharisma, H., & Permata, S. (2023). Tax avoidance in times of crisis: Evidence from Indonesia. Journal of Accounting and Strategic Finance, 6(1), 45–62.
- Putri, N. K., Tjaraka, H., & Anshori, M. (2024). ESG disclosure and corporate behavior in Indonesia: Maqasid Shariah perspective. Journal of Islamic Accounting and Business Research.
- Richardson, G., Taylor, G., & Lanis, R. (2015). The impact of financial distress on corporate tax avoidance spanning the global financial crisis: Evidence from Australia. Economic Modelling, 44, 44–53.
- Sadjiarto, A., Florencia, & Nevanda, O. (2019). Effects of political connections and corporate governance on tax aggressiveness in Indonesian service and banking sectors. Journal of Economics and Business, 2(1), 190–204.
- Wardhana, R., Anshori, M., & Tjaraka, H. (2022). Determinants moderators of financial distress: An evidence affiliation group and political connection. AKRUAL: Jurnal Akuntansi, 14(1), 132–147.
- Yadav, A., & Asongu, S. A. (2024). ESG performance and firm resilience during crises: Evidence from emerging markets. Emerging Markets Review, 59, 100974.
References
Akmalia, A. (2020). Pengaruh struktur modal, struktur aset dan profitabilitas terhadap potensi terjadinya financial distress perusahaan. Business Management Analysis Journal (BMAJ), 3(1), 1–21.
Elamer, A. A., Ntim, C. G., Abdou, H. A., Zalata, A. M., & Elmagrhi, M. H. (2024). Does ESG performance influence corporate tax avoidance? Evidence from global firms. Journal of International Accounting, Auditing and Taxation, 54, 100547.
Kalbuana, N., Susanti, H., & Rahmawati, R. (2023). Financial distress prediction and its determinant in Indonesia’s capital market. International Journal of Financial Research, 14(2), 23–36.
Kamayanti, A., Kharisma, H., & Permata, S. (2023). Tax avoidance in times of crisis: Evidence from Indonesia. Journal of Accounting and Strategic Finance, 6(1), 45–62.
Putri, N. K., Tjaraka, H., & Anshori, M. (2024). ESG disclosure and corporate behavior in Indonesia: Maqasid Shariah perspective. Journal of Islamic Accounting and Business Research.
Richardson, G., Taylor, G., & Lanis, R. (2015). The impact of financial distress on corporate tax avoidance spanning the global financial crisis: Evidence from Australia. Economic Modelling, 44, 44–53.
Sadjiarto, A., Florencia, & Nevanda, O. (2019). Effects of political connections and corporate governance on tax aggressiveness in Indonesian service and banking sectors. Journal of Economics and Business, 2(1), 190–204.
Wardhana, R., Anshori, M., & Tjaraka, H. (2022). Determinants moderators of financial distress: An evidence affiliation group and political connection. AKRUAL: Jurnal Akuntansi, 14(1), 132–147.
Yadav, A., & Asongu, S. A. (2024). ESG performance and firm resilience during crises: Evidence from emerging markets. Emerging Markets Review, 59, 100974.