Impact of in-kind benefits on tax efficiency: A case study of PT Kurnia Luwuk Sejati

Abstract

Tax efficiency is one of the determinants of performance and sustainability of
companies all over the world. This research analyzes the level of Indonesian tax
efficiency at PT Kurnia Luwuk Sejati in Luwuk Indonesia in the presence of
in-kind benefits. The objective of the research is to investigate as to how these
benefits like housing, transportation etc. can be used as a strategy to lessen
the tax outflows. The data were analyzed in a quantitative research design
and data collection was conducted applying financial records and employee
benefit reports in selecting a sample of employees. The results highlight that
such an awareness of the provisions of the law, particularly Minister of Finance
Regulation No 66/2023, enables a company to adopt an appropriate tax strategy.
In conclusion, in kind benefits help improve tax efficiency provided that these
benefits are taken into account in planning the company’s tax structures.
This research adds to the existing literature of in-kind local contribution by
giving some particulars into the use of such benefits in Indonesia that would
be interesting for other companies wishing to increase their operational tax
efficiency. The findings of this study recommend organizations to align their
tax and regulatory strategies in an optimal manner which abides by regulation
changes while maximizing tax efficiency of the company. Overall, this research
emphasizes the importance of tax planning strategy in improving financial
performance and competitiveness of the firm within a more complex regulatory
framework.