PERTANIKA JOURNAL OF SOCIAL SCIENCES AND HUMANITIES

This study aimed to examine the effect of independent corporate governance organ activities (including the busyness level and political connections of independent directors and audit committee) on the level of tax avoidance. In addition, this study also examined the effect of a country’s tax environment on the relationship between independent corporate governance organ activities and the level of tax avoidance. This paper used cross-country analysis with the scope of countries in the ASEAN region, consisting of the Philippines, Indonesia, Malaysia, Singapore, and Thailand. The results of this study showed that the busyness level and political connections of independent directors and the audit committee positively affected the company’s tax avoidance level in a country with an uncompetitive tax environment. On the other hand, the busyness level and political connections of independent directors and the audit committee did not affect the company’s tax avoidance level in a country with a competitive tax environment. The findings prove that the relationship between independent corporate governance organ activities and company tax avoidance activities is affected by the country’s tax environment. This study is the first to examine the role of a country’s tax environment on the relationship between independent corporate governance organ activities and tax avoidance levels.