Tax Amnesty and Financial Statement Manipulation

During 2016-2017, the Indonesian government held a tax amnesty program. This program was responded by both individuals and firms. Many people would think that the parties who took part in the program were presumably bad, that is why they decided to take part in the program. However, a recent research conducted by a group of researchers from Bina Nusantara University and Victoria University of Wellington, found out that firms that participated in the tax amnesty program are not necessarily categorised as “bad firms”. They investigated the association between firms which participated in the tax amnesty program and their tendency to manipulate financial statements, based on a sample of 796 firm-year observations in the Indonesian Stock Exchange (IDX) from the 2012-2017 period. The researchers found evidence that firms who participated in tax amnesty programs do not engage in financial statements manipulation. Further analysis of the corporate tax avoidance measures shows that those firms do not engage in tax avoidance activities either. The publication can be accessed at https://journal.binus.ac.id/index.php/winners/article/view/5616/3673