Navigating Tax Allowance: Energy Entity Compliance in Indonesia Deden Tarmidi, Agustin Fadjarenie, Kevin Imannuel
Department of Accounting, Universitas Mercu Buana, Indonesia
Abstract
To support the achievement of zero emissions by 2060, the Indonesian government issued a policy for companies to participate in supporting this. Tax allowance is one of the policies issued for energy companies to use in assisting the company^s operational activities and divert it to costs that support the green economy in Indonesia. This study investigates how the level of tax compliance of energy companies in Indonesia, the utilization of tax allowances by energy companies, and investor reactions to energy companies.
Using quantitative and qualitative approaches from data of energy companies on the Indonesia Stock Exchange in the year range of 2017 to 2023, the results of this study show that the level of tax compliance of energy companies is low, except for the level of tax compliance of renewable energy companies. While the utilization of tax allowances by energy companies is minimal. On the other hand, investors^ assessment of the financial performance of energy companies is positive but the opposite reaction is found on the tax compliance of energy companies. This result encourages the government to issue more attractive green economy policies to be implemented by companies, not only in the form of tax allowances but also ease in the investment process. This research provides new insights in understanding the relationship between regulators and practitioners in supporting the implementation of the green economy, especially in tax policy.
Keywords: Tax Allowance, Tax Compliance, Energy Company
Topic: Taxation and Regulatory Compliance in Energy Accounting
