Do Financial Reporting Transparency and Green Accounting Reduce Tax Avoidance? The Mediating Role of Environmental Performance

Dian Sulistyorini Wulandari; Neng Asiah; Elektra Naurah Salsabila

doi:10.61132/anggaran.v4i2.2489

Authors

Dian Sulistyorini Wulandari Universitas Pelita Bangsa
Neng Asiah Universitas Pelita Bangsa
Elektra Naurah Salsabila Universitas Pelita Bangsa

DOI:

https://doi.org/10.61132/anggaran.v4i2.2489

Keywords:

Environmental Performance, Financial Reporting Transparency, Green Accounting, SEM-PLS, Tax Avoidance

Abstract

Tax avoidance continues to attract considerable attention from regulators, investors, and other stakeholders because it affects government revenue, corporate transparency, and public trust. At the same time, increasing expectations for sustainable business practices have encouraged companies to improve financial reporting transparency and adopt green accounting as part of their environmental and governance responsibilities. However, previous studies provide inconsistent evidence regarding whether these practices genuinely reduce tax avoidance or merely serve as legitimacy mechanisms. Therefore, this study aims to examine the effects of financial reporting transparency and green accounting on tax avoidance, with environmental performance acting as a mediating variable. The study employs a quantitative explanatory research design using secondary data collected from annual reports, sustainability reports, and financial statements of non-financial companies listed on the Indonesia Stock Exchange during the 2021–2025 period. The data are analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) to evaluate both direct and indirect relationships among the variables. The findings indicate that financial reporting transparency and green accounting significantly reduce tax avoidance, while environmental performance partially mediates these relationships. These results suggest that greater corporate transparency and environmental accountability contribute to more responsible tax behavior. The study provides theoretical contributions to agency, stakeholder, and legitimacy theories and offers practical implications for regulators and corporate managers in promoting sustainable governance and ethical tax compliance.

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