THE GOVERNANCE MODEL IN TOTAL COMPREHENSIVE TAX AND LEVERAGE TAX AVOIDANCE WITH G-SCORE AS A MODERATOR
Keywords:
corporate governance, G-Score, leverage, tax avoidance, total comprehensive incomeAbstract
This study aims to examine the effect of Total Comprehensive Income (TCI) and leverage on tax avoidance by incorporating G-Score as a moderating variable. The increasing use of fair value measurement in financial reporting provides more discretion in recognizing Other Comprehensive Income (OCI), creating opportunities for firms to engage in tax planning. Likewise, financial pressure, reflected through leverage, is often associated with firms’ incentive to reduce tax burdens. This research employs a quantitative approach using 20 manufacturing firms listed on the Indonesia Stock Exchange (IDX) during 2020–2024, resulting in 90 observations. The analytical method used is Moderated Regression Analysis (MRA). The findings reveal that TCI significantly influences tax avoidance, while leverage does not. G-Score weakens the effect of TCI on tax avoidance, indicating the role of governance mechanisms in controlling managerial discretion within OCI reporting. However, G-Score does not moderate the relationship between leverage and tax avoidance. These findings highlight the importance of governance quality in overseeing comprehensive reporting practices that may lead to aggressive tax behavior.
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