From Index to Narrative: Exploring GRI 207 Tax Governance Reporting in Indonesian Firms
DOI:
https://doi.org/10.35591/wahana.v29i1.986Keywords:
GRI, Tax Governance, Disclosure, Frame, ToneAbstract
The narrative features of firms’ tax disclosures under Global Reporting Initiative (GRI) 207 are examined in this study. This study has two main goals, which are: (1) to determine the prevailing narrative tone of GRI 207 reports; and (2) to ascertain whether this narrative disclosure differs significantly between firms with different levels of financial metrics, particularly cost of debt and financial distress. GRI 207 Tax Governance reports of 38 non-financial enterprises were examined over a three-year period, yielding 141 firm-year observations that make up the research sample. For comparison t-tests, financial variables are retrieved, such as financial distress (Altman-Z Score) and cost of debt (interest expenses divided by total debt). The narrative analysis's findings show that GRI 207 disclosures generally have an affirmative and bureaucratic tone. The majority of studies show comparable trends, indicating a high level of homogeneity. The comparison research, which shows no discernible variation in disclosure quality or tone in relation to firms' cost of debt or financial distress levels, supports this conclusion. This analysis provides a descriptive benchmark of current tax reporting methods and raises the possibility that disclosures are uniform rather than representative of particular corporate conditions. Because it does not examine the underlying institutional or power dynamics generating these patterns, the study is constrained by its descriptive scope. It is recommended that future studies look at these dynamics in order to comprehend the factors influencing the uniformity of corporate tax disclosure.
Downloads
References
Albarrak, M. S., Elnahass, M., & Salama, A. (2019). The effect of carbon dissemination on cost of equity. Business Strategy and the Environment, 28(6), 1179–1198. https://doi.org/10.1002/bse.2310
Alexander, A., & Menicacci, L. (2025). Tax governance as a social responsibility of the firm: evidence from the Italian cooperative compliance program. Social Responsibility Journal, 21(8), 1549–1565. https://doi.org/10.1108/SRJ-01-2025-0094
Arena, C., Bozzolan, S., & Michelon, G. (2015). Environmental Reporting: Transparency to Stakeholders or Stakeholder Manipulation? An Analysis of Disclosure Tone and the Role of the Board of Directors. Corporate Social Responsibility and Environmental Management, 22(6), 346–361. https://doi.org/10.1002/csr.1350
Asay, H. S., Libby, R., & Rennekamp, K. (2018). Firm performance, reporting goals, and language choices in narrative disclosures. Journal of Accounting and Economics, 65(2–3), 380–398. https://doi.org/10.1016/j.jacceco.2018.02.002
Ayuningtyas, E. S., & Harymawan, I. (2021). Negative Tone and Readability in Management Discussion and Analysis Reports: Impact on The Cost of Debt. Jurnal Manajemen Teori Dan Terapan| Journal of Theory and Applied Management, 14(2), 129. https://doi.org/10.20473/jmtt.v14i2.26681
Beretta, V., Demartini, M. C., & de Villiers, C. (2025). Integrated reporting: developing an injustice assessment framework and a research agenda. Accounting, Auditing & Accountability Journal, 38(9), 1–29. https://doi.org/10.1108/AAAJ-02-2024-6917
Cheng, C. S. A., Kim, J., Rhee, M., & Zhou, J. (2022). Time Orientation in Languages and Tax Avoidance. Journal of Business Ethics, 180(2), 625–650. https://doi.org/10.1007/s10551-021-04892-3
Darics, E. (2019). Critical Language and Discourse Awareness in Management Education. Journal of Management Education, 43(6), 651–672. https://doi.org/10.1177/1052562919848023
Depoers, F., & Jérôme, T. (2019). Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure. Journal of Applied Accounting Research, 21(1), 90–105. https://doi.org/10.1108/JAAR-04-2018-0048
Edgley, C., & Holland, K. (2021). “Unknown unknowns” and the tax knowledge gap: Power and the materiality of discretionary tax disclosures. Critical Perspectives on Accounting, 81, 102227. https://doi.org/10.1016/j.cpa.2020.102227
Faisal, M., Utama, S., Sari, D., & Rosid, A. (2023). Languages and conforming tax avoidance: The roles of corruption and public governance. Cogent Business & Management, 10(3). https://doi.org/10.1080/23311975.2023.2254017
Hasan, A., Anwar, W., Zhang, J. H., & Marques, A. (2025). Corporate tax avoidance and narrative disclosure tone: a developing country perspective. Meditari Accountancy Research, 33(1), 114–143. https://doi.org/10.1108/MEDAR-01-2024-2314
Kubick, T. R., Li, Y., & Robinson, J. R. (2020). Tax-savvy executives. Review of Accounting Studies, 25(4), 1301–1343. https://doi.org/10.1007/s11142-020-09543-y
Laskar, N., & Gopal Maji, S. (2018). Disclosure of corporate sustainability performance and firm performance in Asia. Asian Review of Accounting, 26(4), 414–443. https://doi.org/10.1108/ARA-02-2017-0029
Long, R., Wang, X., Wu, M., Chen, H., Li, Q., & Wang, Y. (2023). The impact of carbon information disclosure on the cost of capital: The moderating role of regulatory pressures. Resources, Conservation and Recycling, 193, 106970. https://doi.org/10.1016/j.resconrec.2023.106970
Na, K., & Yan, W. (2022). Languages and corporate tax avoidance. Review of Accounting Studies, 27(1), 148–184. https://doi.org/10.1007/s11142-021-09596-7
Oats, L., Edgley, C., & Mulligan, E. (2025). Critical Perspectives on Taxation: In praise of heterophony. Critical Perspectives on Accounting, 101, 102794. https://doi.org/10.1016/j.cpa.2025.102794
Oats, L., & Tuck, P. (2019). Corporate tax avoidance: is tax transparency the solution? Accounting and Business Research, 49(5), 565–583. https://doi.org/10.1080/00014788.2019.1611726
Fahad, P., & Busru, S. A. (2021). CSR disclosure and firm performance: evidence from an emerging market. Corporate Governance: The International Journal of Business in Society, 21(4), 553–568. https://doi.org/10.1108/CG-05-2020-0201
Rutherford, B. A. (2003). Obfuscation, Textual Complexity and the Role of Regulated Narrative Accounting Disclosure in Corporate Governance. Journal of Management and Governance, 7(2), 187–210. https://doi.org/10.1023/A:1023647615279
Yan, H., Li, X., Huang, Y., & Li, Y. (2020). The impact of the consistency of carbon performance and carbon information disclosure on enterprise value. Finance Research Letters, 37, 101680. https://doi.org/10.1016/j.frl.2020.101680
Ylönen, M., & Laine, M. (2015). For logistical reasons only? A case study of tax planning and corporate social responsibility reporting. Critical Perspectives on Accounting, 33, 5–23. https://doi.org/10.1016/j.cpa.2014.12.001
Zummo, H., McCredie, B., & Sadiq, K. (2017). Addressing aggressive tax planning through mandatory corporate tax disclosures: An exploratory case study. EJournal of Tax Research, 15(2), 359–383.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Wahana: Jurnal Ekonomi, Manajemen dan Akuntansi
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
