| Summary: | The research aims to test empirically the effect of corporate governance
on tax management. Corporate governances in the research were institutional
ownership, managerial ownership, the proportion of independent director and
audit committee expertise on tax management proxied by effective tax rate (ETR).
The research employed three control variables firm namely size, firm growth and
leverage. The sample in the research was 25 non-financial companies listed at
Indonesia Stock Exchange during 2010-2011 that have been selected based on the
criteria of the research and the annual report of these companies became the
primary data source. The results of the research showed that managerial
ownership, the proportion of independent directors, firm size and leverage had
significant effect on tax management. On the other hand, institutional ownership,
audit committee expertise and firm size do not significantly effect on tax
management. The results of the research also showed that the stakeholders within
the companies, namely independent directors and the managers who had
ownership upon the company share have a role in determining the tax rate that
should be paid to the government.
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