Tax Accounting Applied International Journal, Vol. 01, No.01 (2022) 18 CONSEQUENCES OF TAX AVOIDANCE Alfita Rakhmayani 1* , Clara Yully Diana Ekaristi 2 , Maya Aresteria 3 1,2,3 Diponegoro University, Semarang * alfitar@lecturer.undip.ac.id I N F O A R T I C E L A B S T R A C T History Article: Received October 1, 2022 Revised October 20 , 2022 Published October 22, 2022 Tax avoidance is part of the tax management practices, carried out by companies in the context of tax savings. The practice of tax avoidance is not done without risk. This study aims to examine the impact of tax avoidance practices on the corporat risk, firm value, and cost of debt. The analysis use literature review method by reviewing the results of previous research in 2019-2022. The synthesis of previous research results shows that tax avoidance increases company risk. Meanwhile, tax avoidance tend to be neutral to the cost of debt. Keywords: Tax Avoidance Corporate Risk Firm Value Cost of Debt 1. Introduction State revenues are predominantly from taxes. Taxes contribute more than 80% of state revenue. Data from the Ministry of Finance in 2021 shows that the top contributions are in income tax and value added tax. The Ministry of Finance continues to strive to achieve tax revenue targets through a series of policies. Revenue from taxes is widely used for routine expenses and the development of the state. Various policies are made by the government to optimize state revenues from the taxation sector. Tax observers state that suboptimal tax revenues are caused by taxpayers who commit tax avoidance . Although taxes contribute to the development of the country, from the perspective of enterprises, it suggests that taxes are an organizational burden that allows for the reduction of an economic benefit. Taxes become a cost that will reduce the company's profits. (Carolina & Handayani, 2019)(Paridah & Rokhayati, 2022) The effectiveness and efficiency of the management of the company is often associated with maximum profit . To achieve this, the company will increase revenue and reduce expenses, including tax burdens. The company will implement various strategies to reduce the tax burden. One of the mechanisms is through tax avoidance practices. (Hamidah & R, 2022) Tax avoidance is a legally implemented yang measures to reduce the amount of tax that must be paid. Tax avoidance is part of the tax management practices carried out by companies in the context of tax savings. The emphasis on the minimum amount of tax payable is on targeted profit and