The role of shareholders in controlling tax avoidance: evidence from ASEAN countries

The purpose of this study is to investigate the role of noncontrolling large shareholders (NCLSs) on corporate tax avoidance. It also examines whether family ownership moderates the relationship between NCLSs and tax avoidance. This study is an empirical work using a sample of 1,092 firms-years listed firms from four ASEAN countries: Indonesia, Malaysia, Philippines and Thailand. The data were analyzed using data panel regression. The results show that NCLSs are negatively associated with corporate tax avoidance, suggesting that NCLSs have an incentive to become governance control by monitoring and restraining an agency problem, but unrelated with by the controlling family. This study extends previous research by examining the role of family ownership as the moderating effect since family ownership generally has family members in managerial and board positions. This study provides a practical implication that regulators should improve the corporate governance policy to increase the protection of minority shareholders’ rights.