Determinants of Tax Aggressiveness in Indonesia: Family Firms and Non-family Firms Point of View

Purpose
This research aims to understand how family firms influence tax aggressiveness in healthcare companies listed on Bursa Efek Indonesia from 2019 to 2023, using profitability, leverage, size, and tangibility as control variables.

Design/Methodology/Approach
This research utilises secondary data in the form of public financial statements from healthcare sector companies, sourced from the database centre Refinitive, with specific criteria: companies that are still actively listed as healthcare companies and are not under threat of bankruptcy during the period 2019-2023. Random effect model using generalized least squares is chosen to process 117 observation data with the help of STATA software.

Findings or Expected Outcomes
The result shows that a family firm does not influence tax aggressiveness. This finding gives a new perspective that the impact of family firm on tax aggressiveness is insignificant when using a healthcare company as a research subject; therefore, the result of past research that shows that family firms influence tax aggressiveness must consider the unique characteristics of the industry, therefore gives different results.

Originality/Value
This research uses the healthcare industry, which is unique due to various tax relief incentives and exemptions provided by the government to the healthcare sector during the pandemic. Furthermore, this research deploys profitability, leverage, firm size and tangibility as its control variables.

Practical/Social Implications
This research implies that a family firm boosts or reduces tax aggressiveness in a company, regardless of how the family, as majority stockholders, tries to influence the company.

Directions for Future Research/Limitations
The research data only covers publicly listed healthcare firms, whereas most Indonesian companies are private SME firms. This research only uses ETR as a tax aggressiveness measure, where multiple other measures, such as cash ETR and book-tax-difference, can also be used to compare findings between each measure. Furthermore, the result might be limited to healthcare firms, where different industries might have their own unique characteristics during the pandemic.