Tax amnesty, corporate social responsibility disclosure, and organizational inertia

Desi Adhariani, Ain Hajawiyah, Rima Kusuma Rini

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the empirical association between corporate social responsibility (CSR) disclosure and tax compliance when there is a tax amnesty policy provided by the government. Utilizing the difference in difference method, we studied the impact of the tax amnesty program on tax compliance and CSR disclosure of companies in the mining industry in Indonesia context for the research period 2014–2019. Consistent with inertia theory, we observe the organizational inertia phenomena as the findings indicate the insignificant impact of the tax amnesty program on tax compliance and the marginally significant negative impact on CSR disclosure. This might come from corporate attributes that cause the inertia such as routines and procedures as well as the fixed mindset of the companies' decision-makers on the cost and benefit of becoming corporate citizens. The inertia might also reflect the weaknesses in the management control system, especially in the belief and boundary control system. This research discusses the impact of tax amnesty on CSR disclosure which has been rarely investigated in previous studies. This study also extends the inertia theory on the taxation context and provides policy implications on tax amnesty.

Original languageEnglish
Article numbere317
JournalBusiness Strategy and Development
Volume7
Issue number1
DOIs
Publication statusAccepted/In press - 2023

Keywords

  • corporate social responsibility
  • inertia theory
  • organizational inertia
  • tax amnesty
  • tax compliance

Fingerprint

Dive into the research topics of 'Tax amnesty, corporate social responsibility disclosure, and organizational inertia'. Together they form a unique fingerprint.

Cite this