The Effect of Financial Constraints and Political Connections on Tax Aggressiveness with ESG Disclosure as a Moderating Variable


  • Tuty Hajriati Universitas Brawijaya
  • Aulia Fuad Rahman Universitas Brawijaya
  • Mohamad Khoiru Rusydi Universitas Brawijaya



Financial Constraints, Political Connections, ESG Disclosure, Tax Aggressiveness


This study investigated the effect of financial constraints and political connections on tax aggressiveness. Additionally, ESG disclosure was used as a moderating variable to examine the impact of financial constraints and political connections on tax aggressiveness. Quantitative research uses secondary data. Data was collected from company reports, annual reports, and sustainability reports. The data was analyzed using hypothesis tests. The results of this study demonstrated that financial constraints and political connections positively influenced tax aggressiveness. Furthermore, this study revealed that ESG disclosure could weaken the positive influence of financial constraints on tax aggressiveness. In addition, ESG disclosure did not moderate the influence of political connections on tax aggressiveness. The tax authority can improve PMK No. 22/PMK.03/2020, about procedures for implementing transfer price agreements in unique company relationships by considering ESG disclosure to prevent an increase in tax aggressiveness. This study adds ESG disclosure to classify the inconsistency of previous research (Adela et al., 2023; Solikin & Slamet, 2022; Octaviani & Sofie, 2018), which are thought to have a combined influence on the financial constraints and political connections on tax aggressiveness.


Download data is not yet available.


A’alia, P. S., & Rachmawati, N. A. (2022). Pengaruh Financial Constraint terhadap Agresivitas Pajak di Masa Pandemi dengan Komisaris Independen sebagai Variabel Moderasi. Jurnal Akuntansi dan Keuangan, 11(1), 73-90.

Adela, V., Agyei, S. K., & Peprah, J. A. (2023). Antecedents of Tax Aggressiveness of Listed Non-Financial Firms: Evidence from an Emerging Economy. Scientific African, 20, e01654, 1-14.

Agustini, Y., Azwardi, A., & Mukhtaruddin, M. (2023). Pengaruh Environment, Social, and Governance, dan Financial Distress terhadap Tax Aggressiveness di Indonesia: CEO Gender sebagai Variabel Moderasi. Jurnal Informatika Ekonomi Bisnis, 5(3), 920-926.

Angela, T., & Sari, N. (2023). The Effect of Environmental, Social, and Governance Disclosure on Firm Value. E3S Web of Conferences, 426, 01078, 1-8.

Biddle, G. C., & Hilary, G. (2006). Accounting Quality and Firm‐Level Capital Investment. The Accounting Review, 81(5), 963-982.

Sekaran, U., & Bougie, R. (2019). Research Methods for Business: A Skill Building Approach. New York: John Wiley & Sons.

Chen, T., & Lin, C. (2017). Does Information Asymmetry Affect Corporate Tax Aggressiveness? Journal of Financial and Quantitative Analysis, 52(5), 2053-2081.

Chouaibi, J., Rossi, M., & Abdessamed, N. (2022). The Effect of Corporate Social Responsibility Practices on Tax Avoidance: An Empirical Study in the French Context. Competitiveness Review, 32(3), 326-349.

Diafitri, F. A., & Helmy, H. (2023). Pengaruh Political Connection dan Managerial Ownership terhadap Tax Aggressiveness. Jurnal Eksplorasi Akuntansi (JEA), 5(4), 1674-1689.

Edwards, A., Schwab, C., & Shevlin, T. (2016). Financial Constraints and Cash Tax Savings. The Accounting Review, 91(3), 859-881.

Fadillah, A. N., & Lingga, I. S. (2021). Pengaruh Transfer Pricing, Koneksi Politik, dan Likuiditas terhadap Agresivitas Pajak (Survey terhadap Perusahaan Pertambangan yang terdaftar di BEI Tahun 2016-2019). Jurnal Akuntansi, 13(2), 332-343.

Firmansyah, A., Arham, A., Qadri, R. A., Wibowo, P., Irawan, F., Kustiani, N. A., & Mahrus, M. L. (2022). Political Connections, Investment Opportunity Sets, Tax Avoidance: Does Corporate Social Responsibility Disclosure in Indonesia Have a Role? Heliyon, 8, e10155, 1-13.

Fitriana, A., & Rachmawati, N. A. (2021). The Effect of Financial Constraints and Institutional Ownership on Tax Aggressiveness. Accounting Research Journal of Sutaatmadja (ACCRUALS), 05(01), 38-52.

Flamini, G., Vola, P., Songini, L., & Gnan, L. (2021). The Determinants of Tax Aggressiveness in Family Firms: An Investigation of Italian Private Family Firms. Sustainability, 13(14), 7654, 1-21.

Ghozali, I., & Ratmono, D. (2017). Analisis Multivariat dan Ekonometrika: Teori, Konsep, dan Aplikasi dengan Eviews 10. Semarang: Badan Penerbit Universitas Diponegoro.

Gray, R., Owen, D., & Adams, C. (1996). Accounting and Accountability: Changes and Challenges in Corporate Social and Environmental Reporting. London: Prentice Hall.

Hovakimian, A., & Hovakimian, G. (2009). Cash Flow Sensitivity of Investment. European Financial Management, 15(1), 47-65.

Iswari, P., Sudaryono, E. A., & Widarjo, W. (2019). Political Connection and Tax Aggressiveness: A Study on the State-Owned Enterprises Registered in Indonesia Stock Exchange. Journal of International Studies, 12(1), 79-92.

Jankensgård, H. (2018). Between a Rock and a Hard Place: New Evidence on the Relationship Between Ownership and Voluntary Disclosure. International Review of Financial Analysis, 56, 281-291.

Jeanice, J., & Kim, S. S. (2023). Pengaruh Penerapan Environmental, Social, and Governance terhadap Nilai Perusahaan di Indonesia. Owner: Riset & Jurnal Akuntansi, 7(2), 1646-1653.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.

Kim, C., & Zhang, L. (2016). Corporate Political Connections and Tax Aggressiveness. Contemporary Accounting Research, 33(1), 78-114.

Koh, Y., & Lee, H. A. (2015). The Effect of Financial Factors on Firms’ Financial and Tax Reporting Decisions. Asian Review of Accounting, 23(2), 110-138.

Krisyadi, R., & Anita, A. (2022). Pengaruh Pengungkapan Tanggung Jawab Sosial Perusahaan, Kepemilikan Keluarga, dan Tata Kelola Perusahaan terhadap Penghindaran Pajak. Owner: Riset & Jurnal Akuntansi, 6(1), 416-425.

Lestari, P., Pratomo, D., & Asalam, A. (2019). Pengaruh Koneksi Politik dan Capital Intensity terhadap Agresivitas Pajak. Jurnal ASET (Akuntansi Riset), 11(1), 41-53.

Li, C., Wang, Y., Wu, L., & Xiao, J. Z. (2012). Political Connections and Tax-Induced Earnings Management: Evidence from China. The European Journal of Finance, 1-19.

Li, H., Meng, L., Wang, Q., & Zhou, L. A. (2008). Political Connections, Financing and Firm Performance: Evidence from Chinese Private Firms. Journal of Development Economics, 87(2), 283-299.

Namazi, M., & Namazi, N. R. (2016). Conceptual Analysis of Moderator and Mediator Variables in Business Research. Procedia Economics and Finance, 36, 540-554.

Nurlaely, H., & Dewi, R. R. (2023). Pengaruh Pengungkapan Corporate Governance, Environmental Social Governance, Environmental Uncertainty dan Corporate Reputation terhadap Tax Avoidance. Jurnal Ilmiah EDUNOMIKA, 08(01), 1-15.

Octaviani, R. R., & Sofie, S. (2018). Pengaruh Good Corporate Governance, Capital Intensity Ratio, Leverage, dan Financial Distress terhadap Agresivitas Pajak pada Perusahaan Tambang yang terdaftar di BEI Tahun 2013-2017. Jurnal Akuntansi Trisakti, 5(2), 253-267.

OECD. (2020). Revenue Statistics in Asian and Pacific Economies 2020. OECD.

Pfeffer, J., & Salancik, G. R. (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper & Row.

Putri, D. B. K., & Damayanti, T. W. (2021). Penghindaran Pajak: Efek Struktur Kepemilikan Asing dan Preferensi Risiko CEO & CFO. Akuntansi Bisnis & Manajemen (ABM), 28(01), 11-24.

Satiti, A. D. R., Syafik, M., & Widarjo, W. (2021). Political Connections and Tax Aggressiveness: The Role of Gender Diversity as a Moderating Variable. Media Riset Akuntansi Auditing & Informasi, 21(2), 273-292.

Siska, S., Halimahtussakdiah, H., & Harahap, S. R. (2022). Pengaruh Corporate Social Responsibility, Tingkat Utang, dan Ukuran Perusahaan terhadap Agresivitas Pajak Perusahaan Sektor Industri Barang Konsumsi yang terdaftar pada Bursa Efek Indonesia Periode 2018-2020. Management Studies and Entrepreneurship Journal (MSEJ), 3(2), 569-594.

Solikin, A., & Slamet, K. (2022). Pengaruh Koneksi Politik, Struktur Kepemilikan, dan Kebijakan Dividen terhadap Agresivitas Pajak. Jurnal Pajak dan Keuangan Negara (PKN), 3(2), 270-283.

Stiglingh, M., Smit, A. R., & Smit, A. (2022). The Relationship Between Tax Transparency and Tax Avoidance. South African Journal of Accounting Research, 36(1), 1-21.

Tan, Y., & Zhu, Z. (2022). The Effect of ESG Rating Events on Corporate Green Innovation in China: The Mediating Role of Financial Constraints and Managers' Environmental Awareness. Technology in Society, 68, 101906, 1-13.

Yoon, B., Lee, J. H., & Cho, J. H. (2021). The Effect of ESG Performance on Tax Avoidance-Evidence from Korea. Sustainability, 13, 6729, 1-16.




How to Cite

Hajriati, T., Rahman, A. F., & Rusydi , M. K. . (2024). The Effect of Financial Constraints and Political Connections on Tax Aggressiveness with ESG Disclosure as a Moderating Variable. Atestasi : Jurnal Ilmiah Akuntansi, 7(2), 895–906.