JEFMS Journal

ABSTRACT:

The practice of tax avoidance cannot be avoided as long as the tax regulations are still multi-interpreted. Tax avoidance also occurs because of the lack of a humanistic approach, as referred to in organizational legitimacy theory, planned behavior theory, stakeholder theory of corporation and agency theory. Basically, humans prefer to get rewards and avoid punishment. Tax policy provides more rewards than punishment. In addition, the theological approach for company executives is not carried out and considers the practice of tax avoidance is still reasonable and innocent.

Companies use financial and non-financial aspects to avoid tax. The research focuses on financial aspects, such as return on assets, debt to equity ratio, firm size, sales growth, current ratio and capital intensity. The object of the research is manufacturing companies listed on the Indonesia stock exchange from 2015 to 2020. The purposive sampling method was used for sampling and the number of samples in this study amounted to 545 test units, consisting of 91 companies for 6 years of research using moderated regression analysis.

The findings from the results of data processing are that the variables of return on assets, debt to equity ratio, firm size, capital intensity ratio and sales growth have an influence on tax avoidance. While the current ratio has no effect on tax avoidance. The independent commissioner variable is proven to be able to moderate the relationship between return on assets, debt to equity ratio, and capital intensity ratio with tax avoidance. Meanwhile, the proportion of independent commissioners is proven not to moderate the relationship between firm size, sales growth and current ratio with tax avoidance.

KEYWORDS:

capital intensity, current ratio, debt to equity ratio, firm size, return on assets, sales growth, proportion of independent commissioners, tax avoidance

REFERENCES:

1) Agustina, S. A. (2016). Pengaruh Likuiditas dan Leverage terhadap Agrevisitas Pajak Perusahaan Manufaktur (Studi Empiris pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Tahun 2010-2012). Universitas Widyatama.

2) Aisah, A. N., & Mandala, K. (2016). Pengaruh Return On Equity, Earning Per Share, Firm Size dan Operating Cash Flow Terhadap Return Saham. E-Jurnal Manajemen Universitas Udayana, 5(11).

3) Ajzen, I., & Fishbein, M. (1975). A Bayesian analysis of attribution processes. Psychological Bulletin, 82(2), 261.

4) Ardana, I. C., Sugiarto, E., & Yuniarwati, Y. (2017). Keterkaitan Kesehatan Spiritual (Spiritual Well-Being) Dan Orientasi Keputusan Etis (Ethical Orientation Of Decision Making)(Studi Empiris terhadap Para Pembuat Keputusan di Indonesia Tahun 2016). Jurnal Akuntansi, 21(1), 95–113.

5) Ariawan, I. M. A. R., & Setiawan, P. E. (2017). Pengaruh Dewan Komisaris Independen, Kepemilikan Institusional, Profitabilitas Dan Leverge Terhadap Tax Avoidance. E-Jurnal Akuntansi, 18(3), 1831–1859.

6) Brigham, E. F., & Houston, J. F. (2010). Dasar-Dasar Manajemen Keuangan: Essensial of Financial Management Buku 1.

7) Chava, S., Oettl, A., Subramanian, A., & Subramanian, K. v. (2013). Banking deregulation and innovation. Journal of Financial Economics, 109(3), 759–774.

8) Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of Financial Economics, 95(1), 41–61.

9) Chiou, Y.-C., Hsieh, Y.-C., & Lin, W. (2012). Determinants of effect tax rates for firms listed on China’s stock markets: panel models with two-sided censors. The Business & Management Review, 3(1), 306.

10) Defond, M. L., & Hung, M. (2004). Investor protection and corporate governance: Evidence from worldwide CEO turnover. Journal of Accounting Research, 42(2), 269–312.

11) Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79(1), 145–179.

12) Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65–91.

13) Dowling, J., & Pfeffer, J. (1975). Organizational legitimacy: Social values and organizational behavior. Pacific Sociological Review, 18(1), 122–136.

14) Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long‐run corporate tax avoidance. The Accounting Review, 83(1), 61–82.

15) Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2010). The effects of executives on corporate tax avoidance. The Accounting Review, 85(4), 1163–1189.

16) Frank, M. J., & Hutchison, K. (2009). Genetic contributions to avoidance-based decisions: striatal D2 receptor polymorphisms. Neuroscience, 164(1), 131–140.

17) Frankfurter, G. M., & Wood Jr, B. G. (2002). Dividend policy theories and their empirical tests. International Review of Financial Analysis, 11(2), 111–138.

18) Hanlon, M., & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50(2–3), 127–178.

19) Hidajat, N. C. (2018). Pengaruh return on equity, earnings per share, economic value added, dan market value added terhadap return saham perusahaan sektor pertanian yang terdaftar di bursa efek indonesia periode 2010-2016. Jurnal Ekonomi, 23(1), 62–75.

20) Higgins, D., Omer, T. C., & Phillips, J. D. (2011). Does a Firm’s Business Strategy Influence its Level of Tax Avoidance? 2011 American Taxation Association Midyear Meeting: JATA Conference.

21) Huseynov, F., & Klamm, B. K. (2012). Tax avoidance, tax management and corporate social responsibility. Journal of Corporate Finance, 18(4), 804–827.

22) Iswahyudi, I., Djaddang, S., Suyanto, S., & Darmansyah, D. (2021). Peran CEO Overconfidance dan Company Performance Terhadap Return Saham Dimoderasi Devidend Policy. Jurnal Riset Akuntansi Tirtayasa, 6(1), 35–47.

23) Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs and ownership structure. In Corporate Governance (pp. 77–132). Gower.

24) Kalil, N. (2019). Prediction of Tax Avoidance Behavior Among Transportation and Logistic Sector Firms in Brazil. International Journal of Advanced Economics, 1(2), 55–60.

25) Kifni, M. (2011). Detected tax evasion is only IDR 1.18 trillion. News: Finace.Detik.Com.

26) Lanis, R., & Richardson, G. (2012). Corporate social responsibility and tax aggressiveness: An empirical analysis. Journal of Accounting and Public Policy, 31(1), 86–108.

27) Lanis, R., & Richardson, G. (2013). Corporate social responsibility and tax aggressiveness: a test of legitimacy theory. Accounting, Auditing & Accountability Journal.

28) Mappadang, A. (2020). Do Characteristic Of Firm Related To Corporate Tax Avoidance? American International Journal of Business Management (AIJBM) ISSN, 3(4), 68–79.

29) Maula, H., Saifullah, M., Nurudin, N., & Zakiy, F. S. (2019). The Influence of Return on Assets, Leverage, Size, and Capital Intensity on Tax Avoidance. AFEBI Accounting Review, 4(1), 50–62.

30) Noor, R. M., Fadzillah, N. S. M., & Mastuki, N. (2010). Tax planning and corporate effective tax rates. 2010 International Conference on Science and Social Research (CSSR 2010), 1238–1242.

31) Pohan, C. A., Rahmi, N., Arimbhi, P., & Junaidi, A. (2022). Automatic Exchange of Information Review from the Perspective of its Effectives in Minimizing Tax Evasion. Ilomata International Journal of Tax and Accounting, 3(2), 117–138.

32) Pollock, T. G., Chen, G., Jackson, E. M., & Hambrick, D. C. (2010). How much prestige is enough? Assessing the value of multiple types of high-status affiliates for young firms. Journal of Business Venturing, 25(1), 6–23.

33) Putra, I. P. A. S., Sinarwati, N. K., & Wahyuni, M. A. (2017). Akuntabilitas dan Transparansi Pengelolaan Alokasi Dana Desa (ADD) di Desa Bubunan, Kecamatan Seririt, Kabupaten Buleleng. JIMAT (Jurnal Ilmiah Mahasiswa Akuntansi) Undiksha, 8(2).

34) Rahmadi, Z. T., Suharti, E., & Sarra, H. D. (2020). Pengaruh Capital Intensity dan Leverage Terhadap Agresivitas Pajak pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI) Periode 2014-2018. Balance Vocation Accounting Journal, 4(1), 58.

35) Ratmono, D., & Sagala, W. M. (2015). Pengungkapan corporate social responsibility (CSR) sebagai sarana legitimasi: dampaknya terhadap tingkat agresivitas pajak. Nominal: Barometer Riset Akuntansi Dan Manajemen, 4(2), 16–30.

36) Richardson, G., & Lanis, R. (2007). Determinants of the variability in corporate effective tax rates and tax reform: Evidence from Australia. Journal of Accounting and Public Policy, 26(6), 689–704.

37) Rozak, T. S., Hardiyanto, A. T., & Fadillah, H. (2019). Pengaruh Profitabilitas, Likuiditas, Dan Leverage Terhadap Tax Avoidance. Jurnal Online Mahasiswa (JOM) Bidang Akuntansi, 5(1).

38) Sinaga, C. H., & Suardikha, I. M. S. (2019). Pengaruh leverage dan capital intensity pada tax avoidance dengan proporsi komisaris independen sebagai variabel pemoderasi. E-Jurnal Akuntansi, 27(1), 1–32.

39) Sindelarova, K., Granier, C., Bouarar, I., Guenther, A., Tilmes, S., Stavrakou, T., Müller, J.-F., Kuhn, U., Stefani, P., & Knorr, W. (2014). Global data set of biogenic VOC emissions calculated by the MEGAN model over the last 30 years. Atmospheric Chemistry and Physics, 14(17), 9317–9341.

40) Smith, A. (1998). An inquiry into the nature and causes of the wealth of nations: a selected edition. Oxford University Press, USA.

41) Wijayanti, A., Wijayanti, A., & Samrotun, Y. C. (2016). Pengaruh karakteristik perusahaan, GCG dan CSR terhadap penghindaran pajak.