Political connections and tax aggressiveness: the moderating role of gender diversity on boards of directors in Indonesia

Introduction Tax aggressiveness remains a significant problem in developing countries due to weak enforcement and political influence over corporate behavior. This study investigates the impact of political connections on tax aggressiveness in Indonesia and examines whether female directors moderate this relationship. Methods Using panel data of Indonesian listed firms from 2020–2022 and two tax proxies—Cash Effective Tax Rate (CETR) and Book–Tax Differences (BTD)—we measure political ties at both the CEO and corporate levels, while the proportion of female directors captures gender diversity. Random-effects regressions and lagged models are employed to address endogeneity concerns. Results The results show that political connections consistently increase tax aggressiveness, while female directors do not significantly mitigate this effect, possibly due to their limited representation on Indonesian boards. Discussion These findings build on evidence from emerging economies and underscore the need for stronger governance mechanisms to reduce politically driven tax avoidance.