Political Connections, CSR Integrity, and Tax Avoidance: Roles of Transparency and Enforcement

Aulia Cahya Anisa; Yunaita Rahmawati

doi:10.69725/jipi.v2i1.329

Authors

Aulia Cahya Anisa a. Department Accounting, Faculty of Islamic Economics and Business, UIN Kiai Ageng Muhammad Besari Ponorogo, East Java, Indonesia, 63492
Yunaita Rahmawati b. Department of Sharia Accounting, Faculty of Islamic Economics and Business, UIN Kiai Ageng Muhammad Besari Ponorogo, Ponorogo, East Java, Indonesia, 63492

DOI:

https://doi.org/10.69725/jipi.v2i1.329

Keywords:

Corporate social responsibility, Tax avoidance, Tax transparency, Tolitical connections, Credibility of law enforcement

Abstract

Purpose – This paper investigates how CSR integrity affects corporate tax avoidance through tax transparency commitments in different political and law enforcement contexts.

Design/methodology/approach – This study evaluates behaviour-based governance mechanisms through a survey-based structural equation model, focusing on direct, indirect, and moderating effects.

Findings – Findings indicate that stricter CSR integrity is associated with reduced tax avoidance and greater commitment to tax transparency. Tax transparency is a key factor mediating the relationship between CSR orientation and responsible tax behaviour. Political relationships weaken the impact of CSR ethics, while perceived tax enforcement strengthens the actual transparency of avoidance restrictions. Overall, the results indicate that CSR has a conditional effect on tax behaviour, in terms of internal governance and external institutional pressure.

Originality/value – This study contributes to the CSR–tax literature by combining stakeholder and legitimacy theory with political economy and law enforcement perspectives into an integrated behavioural framework. The study explains why previous findings on CSR and tax avoidance are inconsistent by clearly defining a mediation model of tax transparency commitment, while considering competing sources of legitimacy. These findings imply that CSR only becomes a substantial tool when integrated with internal tax governance and continuously supported by credible law enforcement.

Research Implications – This research supports the need to move beyond symbolic CSR indicators and focus on internal governance mechanisms and institutional boundaries that contribute to the manifestation of ethical corporate behaviour. It also offers a conceptual basis for incorporating tax governance into the broader ESG research agenda.

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Author Biographies

Aulia Cahya Anisa, a. Department Accounting, Faculty of Islamic Economics and Business, UIN Kiai Ageng Muhammad Besari Ponorogo, East Java, Indonesia, 63492

Aulia Cahya Anisa is an undergraduate student at the Faculty of Islamic Economics and Business, UIN Kiai Ageng Muhammad Besari, Ponorogo, Indonesia. Her academic interests focus on Islamic economics, public finance, taxation, and governance within institutional and behavioral frameworks. She is particularly interested in examining how ethical values, regulatory structures, and organizational practices influence economic decision-making and compliance behavior. Her research adopts quantitative and policy-oriented approaches to explore the interaction between governance mechanisms and responsible economic conduct in both public and private sector contexts.
Yunaita Rahmawati, b. Department of Sharia Accounting, Faculty of Islamic Economics and Business, UIN Kiai Ageng Muhammad Besari Ponorogo, Ponorogo, East Java, Indonesia, 63492

Dr. Yunaita Rahmawati is a renowned academic and researcher at the Institut Agama Islam Negeri Ponorogo, specialising in Sharia Accounting. Many of her scientific works discuss Islamic financial reporting standards, governance of Islamic financial institutions, and Islamic micro-enterprise development. Her research not only contributes significantly to the scientific field, but also offers practical solutions for policy makers and industry players. As an educator, Dr Yunaita is committed to transferring the values of Islamic business ethics and fostering a new generation of Islamic accountants who are competent and have high integrity.

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