Journal of Accounting and Business Education
Volume 11, Issue 1, September 2026

Digital Transformation and Regulatory Arbitrage: How Cash Holdings Facilitate Corporate Tax Avoidance

Fadlil Abdani (UIN Maulana Malik Ibrahim)
Moh. Afani (Unknown)
Rama Putra Adi Cahaya (Unknown)
Izzun Nisa’yanayiroh (Unknown)
Ananda Sriphol (Unknown)



Article Info

Publish Date
16 Sep 2026

Abstract

This study aims to examine the effect of digital transformation on tax avoidance and the mediating role of cash holdings in public companies in Indonesia. Using a purposive sampling technique, a final sample of 2,040 firm-year observations was obtained from non-financial companies listed on the Indonesia Stock Exchange for the 2020–2024 period. The data were analyzed using panel data regression, a mediation approach, and two-stage least squares (2SLS) to address potential endogeneity. The results demonstrate that digital transformation consistently and robustly reduces tax avoidance through a direct channel while increasing cash holdings. Cash holdings partially mediate this relationship in a competitive manner, where larger cash reserves actually increase tax avoidance, consistent with the pecuniary motive hypothesis. Nevertheless, the total effect of digital transformation on tax avoidance remains negative. These findings provide crucial implications for tax authorities, particularly in developing countries, highlighting the necessity of technology-based oversight mechanisms to enhance corporate tax compliance and overcome administrative capacity limitations.

Copyrights © 2026






Journal Info

Abbrev

jabe

Publisher

Subject

Education

Description

Journal of Accounting and Business Education aims to help researchers publish their work for a wider audience and discover new connections. Journal of Accounting and Business Education publishes articles from the ideas of philosophical, conceptual, theoretical, critical review, and/or empirical ...