Does GCG moderate the financial distress on tax avoidance?

This study aims to determine the effect of financial distress on tax avoidance, moderated by good corporate governance. This research was conducted on transportation and logistics sector companies listed on the Indonesia Stock Exchange in 2019–2021 because the Indonesian economy began to experience a contraction as a result of the COVID-19 Pandemic in 2019 and continued until 2021, therefore it has an impact on state tax revenues. The sample was selected using a purposive sampling technique, and 14 companies were identified. The data analysis technique used is moderation regression analysis. This study also uses factor analysis techniques to find the best factors to serve as proxies for corporate governance. The results of the study show that financial distress has a positive effect on tax avoidance. This study also found that good corporate governance which is proxied by an independent board of commissioners can weaken the effect of financial distress on tax avoidance. The increasing financial distress in companies, the practice of tax avoidance is also increasing. If the company implements good governance, the management will make less effort to tax avoidance. This is because the more the number of independent commissioners, the more effective it is in supervising the performance of managers.