The Influence of Good Corporate Governance and Liquidity on Tax Management in Indonesia: The Study on Manufacturing Companies

Abstract

The aims of this study is to analyse the effect of good corporate governance and liquidity on tax management. Tax management is measured by modified measure based on Cash effective tax rate (CETR) compared with corporate tax rate. Corporate governance is measured by proportion of independent commissioner, audit committee, audit quality, institutional ownership, and compensation of executive managements, liquidity is measured by current ratio. This research sample consist manufacturing companies selected by purposive sampling. There are 14 companies fulfilling the criteria. This research used binary logistic regression analysis. The results of this research indicate that the proportion of independent commissioner and audit quality positively  affect tax management significantly. Meanwhile, audit committee, institutional ownership, compensation of executive managements and liquidity do not significantly affect the company's tax management.