The Influence of Profitability and Leverage on Tax
Avoidance with Company Size as a Moderation Variable
Icah Putri Utama1, Herry Krisnandi2, Kumba
Digdowiseiso3*
1,2,3* Management Study Program, Faculty of Economics and Business,
National University Jakarta,
Indonesia
Email: 1[email protected], 2[email protected], 3*[email protected]
Abstract
This study aims to analyze the effect of
Profitability and Leverage on Tax Avoidance with Company Size as a Moderating
Variable (Empirical Study of Manufacturing Companies in the Various Industries
Sector Listed on the Indonesia Stock Exchange for the 2017-2021 period). The
data source for this research uses secondary data in the form of financial
reports published on the Indonesia Stock Exchange. In taking the sample for
this study using a purposive sampling method and the samples used in this study
were 12 companies. The data analysis technique used is hypothesis testing which
is processed using the WarpPLS 7.0 application. Based on the results of this
study it was found that Profitability has a significant negative effect on Tax
Avoidance, Leverage has no effect on Tax Avoidance, Company Size does not
moderate the effect of Profitability on Tax Avoidance, and Company Size does
not moderate the influence of Leverage on Tax Avoidance.
Keywords:
Profitability, Leverage, Company Size, Tax Avoidance.
INTRODUCTION
Tax is Wrong One source reception country which very important, along with other sources
of revenue, namely oil and gas revenues or non-tax revenues. The government
strives to continue to increase the revenue target from the tax sector. Tax
revenues are influenced by a country's economic growth. This is because
economic growth increases people's income and allows people to pay taxes
financially.
According
to Law no. 28 of 2007 concerning General Provisions and Tax Procedures (KUP),
tax is defined as a contribution must to country Which owed by person personal
or an agency that is coercive
based on law, without receiving direct compensation and is used for state needs for as
big as possible prosperity people.
Because tax is a source of state income that finances
all state development expenditure, so taxes play an important role in the life
of the state, especially in the implementation of development.
The
problems commonly faced in taxation are the lack of awareness and compliance of
taxpayers in paying taxes and tax avoidance is also an obstacle that occurs in
paying taxes, resulting in reduced state revenues. Many taxpayers still violate
existing tax regulations.
Phenomenon Which related in avoidance tax that
is happen at the company big, Wrong the
only one is case PT. Adaro Energy Tbk, suspected of committing tax evasion by
making transfers pricing through
children his company in Singapore. Matter
That has done since 2009 until
2017, PT. Adaro Energy Tbk reported has arrange payment
tax amount US$ 125 Million
or 1.75 trillion (with exchange rate Rp 14,000) more lower
than what should be paid to the Indonesian government. PT. Adaro Energy Tbk
exploits this loophole by selling coal at a cheaper price to Coaltrade Services
International, then selling the coal to other countries at a higher price. As a
result, the income tax imposed in Indonesia is lower (Sugianto, 2019).
Another
tax avoidance phenomenon revealed in the Tax Justice Network report entitled
The State of Tax Justice 2020: Tax Justice in the time of Covid-19 states that
Indonesia is assumed to experience losses of up to US$ 4.86 billion per year,
equivalent to IDR 68.7 billion. Trillion (at an exchange rate of Rp. 14,149)
due to avoidance tax company
in Indonesia. Temporary the rest US$ 78.83 million or around Rp. 1.1 trillion which
came from individual taxpayers. Tax Justice Network findings state that in
practice multinational companies shift their profits to countries that are
considered to offer much lower tax rates and even no tax obligations, with the
aim of not reporting how much profit is actually generated, so that the company
can pay less tax than it should be. Meanwhile, for taxpayer�s person
personal which classified person rich hide assets and income declared abroad (Santoso,
2020).
Companies
that are taxpayers have obligations for pay tax which
big determined by profit clean ones obtained. Number of
receipts country increase
along with the amount of tax paid by the company.
But for companies, taxes are burden which
can reduce profit
clean. Objective government to maximize state revenues from the tax sector is contrary to
the objectives of the company as a taxpayer, where the company seeks to
minimize its tax burden to generate greater income in order to prosper the
owner and continue continuity life his
company (Yoehana, 2013). There is difference objective the can give
rise to company For evade
taxes.
According
to Suandy in (Dewi & Noviari, 2017), tax avoidance carried out by companies
uses several strategies to minimize the tax imposed, including: avoidance tax (tax avoidance) is
effort For minimize
legal tax debt by complying
with applicable regulations, and evasion tax (tax evasion)
is effort For reduce debt taxes
illegally (unlawfully) by not
complying with tax laws.
Tax avoidance carried out by
companies is of course a policy taken by company leaders themselves, to try to
reduce tax liabilities overall. Company among other things, namely fines and
negative public perceptions of the company's reputation. However, on the other
hand, tax avoidance is not expected
by companies.
Several
factors can influence the possibility of tax avoidance (tax avoidance) is changes to the tax system from Official
Assessment become Self Assessment Which used by
the Indonesian government for tax collection. Taxpayers are given confidence in
calculating, paying and reporting their own tax obligations. The implementation
of this taxation seems to open up opportunities for taxpayers to manipulate the
amount of tax that must be paid in an effort to reduce company costs, including
their tax burden (Stawati, 2020). Apart from that, there are several other
factors that can influence companies to avoid tax (tax avoidance), including:
Profitability, Leverage, and Company
Size.
Profitability
is the ability of a company to generate profits during a certain period at the
level of sales and assets And capital
share certain. Profitability consists from a number of ratio indicators, Wrong the
only one returns of assets
(ROA). Return of Assets
is a measure that shows
how well the financial performance in a company is, increasingly its height mark ROA which achievable by a company, the company's financial performance the can
be classified Good (Gusti
Come on Light Empress
& Alit Suardana, 2014). So it can be interpreted that the higher the level of
company profitability so level
Which influence action
avoidance taxes (tax avoidance) are also getting higher.
Research (Rahmadani et al., 2020) found that profitability has a positive and
significant effect on tax avoidance, this is because when profits increase
avoidance tax increase matter This caused its height mark ROA Careful tax avoidance planning will be
carried out so that the tendency to avoid tax will increase and this will
result in line with the research that has been carried
out by (Olivia & Dwimulyani, 2019) which shows that
profitability has a positive and significant effect on tax avoidance. This is
different from research conducted by (Irawati et al., 2020) whose results show
that profitability has no effect on tax avoidance because tax avoidance is a
risky practice, so management will not take this opportunity to reduce
investment risk. In addition, tax avoidance can also impose significant costs
on companies, including cost Which
paid to consultant tax, fine reputation and fines paid to the tax authority and research conducted by
(Widodo & Wulandari, 2021) shows the results that profitability influential positive No significant matter This Because
The company does not pay taxes efficiently or it could be said that the
company prefers to comply with the applicable tax laws.
Another
factor that indicates a company is carrying out tax avoidance is seen from the
company's funding policy that is policy
leverage. Leverage is
level debt which
Used by companies to
meet company financing (Dewi & Noviari,
2017). In matter
tax, if a company have if
tax debt is high, the company will also have high debt. Therefore, companies
try to avoid tax (tax avoidance). Leverage
measurement uses the percentage of total debt to equity or company capital
in a period which is also called the Debt
to Equity Ratio (DER) (Saputra & Asyik, 2017). Results study
done (Agustin et al.,
2018) show that leverage
with ratio Debt to Equity Ratio (DER) No has
a significant positive effect on tax avoidance in companies, this shows that the greater or smaller the level of leverage in a company does not affect
the size of tax avoidance in that company. These findings are in line with
research (Yustrianthe & Fatniasih, 2021) Which Also the
result shows that leverage has no effect on tax avoidance
because No all debt will result burden
flower And Not all expenses arising from debt can be
used as deductions profit hit tax. However,
different with results
study conducted by (Harefa et
al., 2021) shows that leverage with a
DER ratio has a significant positive influence on tax avoidance. This is
because the larger the debt, the smaller the taxable profit that will be paid
because the tax incentives on debt interest are greater big.
Company
size is a scale that can classify company become
company big and small based on various aspects such as: total
company assets, share market value, average sales level and number of sales.
Company size shows the stability and ability of the company to carry out its
economic activities. Company size is
also thought to have an influence how company
fulfil obligation taxation and is a factor that can result
in tax avoidance (tax avoidance).
Company scale big will own many sources Power which can utilized for objective certain.
The more the larger the size
of the company, the more complex the transactions the company will carry out.
So this causes companies to use existing loopholes in carrying out tax
avoidance strategies in every transaction (Silvia, 2017). Whereas company
scale small No in
a way optimal for managing its tax
burden due to a lack of experts in taxation. The results of research on the
influence of company size on tax avoidance by
(Rima & Destriana, 2021) show that company size has no effect on tax avoidance. Because, the size of the
company does not influence the company to avoid tax, so it is good company
big nor small own opinion
that tax is something that is burdensome for every
company. Contrary to the results of research by (Siti Sarpingah, 2020), it is stated
that company size has a significant negative effect on tax avoidance, meaning that the smaller the company
size, the lower the tax avoidance will be. Whereas, research conducted by (I. Hidayat & Maulidiyah, 2022) shows
that company size has an effect on tax avoidance.
Based
on explanation on so can made research gaps as as follows:
Table 1. Research Research Gap
|
Research Gap |
Researcher |
Findings |
||
|
There is differences in
Profitability versus Avoidance research results���������� Tax (Tax
Avoidance) |
Rahmadani, ����� Muda ��� & Abubakar
(2020) |
Significant influence |
positive |
|
|
Olivia &
Dwimulyani (2019) |
Significant influence |
positive |
||
|
Irawati, et al
(2020) |
No influential |
|||
|
Widodo &
Wulandari (2021) |
Not
influential significant |
positive |
||
|
There are results |
research differences |
Agustin,
et al (2018) |
No �������������� significant positive effect |
|
|
Leverage against
Tax Avoidance |
Yustrianthe &
Fatniasih (2021) |
No influential |
||
|
Harefa, et al (2021) |
Significant
positive effect |
|||
|
There is differences in research ��� results
on ��� ����������������� Company Size
on Avoidance Tax (Tax Avoidance) |
Rima ������� &
����� Destriana (2021) |
No influential |
||
|
Siti Sarpingah (2020) |
Influential significantly negative |
|||
|
Hidayat &
Maulidiyah (2022) |
Influential |
|||
Source: Data processed by the author (2022)
Based on the
table above, it can be seen that the factors that influence tax avoidance still contain inconsistent results from
previous research regarding profitability, leverage
and company size. The difference between this research and previous
research is that this research uses companies
Manufacture Sector Miscellaneous Industry Which registered in Exchange Indonesian Effect (IDX) which allow for
get Lots opportunities for companies to avoid tax.
This research will use data from the last year, namely 2017-2021.
This research aims to
analyze and obtain empirical evidence regarding the relationship between
profitability and tax avoidance. The main objective of this research is to
explore the extent to which profitability plays a role in influencing tax
avoidance practices.
RESEARCH METHOD
This
research aims to obtain empirical evidence and provide an overview of the
factors that influence tax avoidance. There are three types of variables in
this research, namely the dependent variable (tax avoidance), the independent
variable (profitability and leverage), and the moderating variable (company
size). The research object involves Manufacturing Companies in the Various
Industrial Sectors listed on the Indonesia Stock Exchange (BEI) in the period
2017 to 2021.
The
research method used is quantitative, with the aim of finding out the
relationship between two or more variables. The research plans and stages are
arranged in a table which includes activities such as preparation of proposals,
proposal seminars, data collection, data processing and analysis, as well as
preparation of final reports/final assignments.
The
research data source is secondary, using financial reports of manufacturing
companies in various industrial sectors listed on the IDX for the 2017-2021
period. The research population includes manufacturing companies in various
industrial sectors listed on the IDX during that period, with samples selected
using purposive sampling techniques with certain criteria.
The
types of variables used in this research include the dependent variable (tax
avoidance), the independent variable (profitability and leverage), and the
moderating variable (company size). Operational definitions are provided for
each variable, including calculation formulas for each indicator.
The
data analysis method uses Partial Least Square (PLS) as a Structural Equation
Modeling (SEM) completion technique. The analysis process involves descriptive
statistical analysis, evaluation of the measurement model (outer model), and
evaluation of the structural model (inner model). Hypothesis testing is carried
out through path analysis with a significance level of 5%.
In
this research, the dependent variable (tax avoidance) is measured using Cash
Effective Tax Rates (CETR), while the independent variables (profitability and
leverage) and the moderating variable (company size) have their own operational
definitions and calculation formulas. All these variables were tested using
various evaluation methods including convergent validity, discriminant
validity, and reliability tests. Structural analysis includes assessment of the
coefficient of determination (R2) and Cross-Validated Redundancy (Q2).
Hypothesis testing is used to determine the influence of independent variables
on the dependent variable.
1. Analysis Descriptive
statistics
Descriptive
statistical analysis is a statistical method used to analyze data by describing
or describing generally the characteristics of each research variable which seen from mark average
(mean), maximum, minimum and standard deviation. Results analysis
statistics descriptive can seen in table below this:
Table
2. Statistics Descriptive
|
|
N |
Minimum |
Maximum |
Mean |
Std. Deviation |
|
CETR |
60 |
0.002 |
8,445 |
0.537 |
1,134 |
|
ROA |
60 |
0,000 |
0.716 |
0.073 |
0.110 |
|
DER |
60 |
0.003 |
3,129 |
0.806 |
0.728 |
|
SIZE |
60 |
24,217 |
33,537 |
29,037 |
1,815 |
Source:
Output WarpPLS Processed
by Researchers (2023)
Based
on table 4.3 above, it can be explained that the results of descriptive
statistics with a sample size of 60 companies are as follows:
a. Variable Avoidance Tax
The
tax avoidance variable proxied by cash
effective tax rates (CETR) has the smallest (minimum) value amounting to 0.002 from the company Happy
Perfect Tbk (STAR) in year 2020, And greatest value (maximum) as big as 8,445 from company
Voxels Electric Tbk (VOKS) in 2020. The standard
deviation value of tax avoidance is 1.134 and the average value (mean) is
0.537.
b. Profitability
Variable
The
profitability variable which is proxied by return
on assets (ROA) has the smallest (minimum) value of 0.000 from the Selamat
Selamat Tbk (STAR) company in 2018, and the largest (maximum) value of 0.716
from the Multi Prima Sejahtera Tbk (LPIN) company in 2017 The standard
deviation value of profitability is 0.110 and the average value (mean) is
0.073.
c.
Leverage Variable
Variable leverage Which proxied by debt to equity ratio (DER)
has the smallest (minimum) value of 0.003 from the Selamat Selamat Tbk (STAR)
company in 2019, and the largest (maximum) value of 3.129 from the Sat Nusa
Persada Tbk (PTSN) company on 2018. Standard value the leverage
deviation is 0.728 and the average value (mean) is 0.806.
d. Company Size
Variable
The
company size variable proxied by SIZE has the smallest (minimum) value of
24,217 from the company Multi Prima Sejahtera Tbk (LPIN) in 2019, and the
largest (maximum) value of 33,537 from the company Astra International Tbk
(ASII) in 2021. Standard value the company size deviation is 1.815 and the
average value (mean) is 29.037.
2. Measurement
Model Testing (Outer Model)
The
measurement model (outer model) is
carried out to determine whether the research variables are suitable for use for
valid and reliable measurement. In this stage, convergent validity tests, discriminant validity tests and composite reliability tests are
carried out.
a. Test Validity Convergent (Convergent Validity)
Validity
test convergent relates to the
principle that construct measurement (variable
manifest) must own level correlation which tall. To assess
the convergent validity test, it can be seen from the loading factor value of each construct indicator. The loading factor value must be greater
than 0.7 and mark average variance
extract (AVE) must more big of
0.5. The following are the results of convergent validity testing:
Table 3. Loading Factor Values
|
|
ROA |
DER |
CETR |
SIZE |
SIZE* ROA |
SIZE*DER |
||
|
ROA |
1,000 |
0,000 |
0,000 |
0,000 |
0,000 |
0,000 |
|
|
|
DER |
0,000 |
1,000 |
0,000 |
0,000 |
0,000 |
0,000 |
|
|
|
CETR |
0,000 |
0,000 |
1,000 |
0,000 |
0,000 |
0,000 |
|
|
|
SIZE |
0,000 |
0,000 |
0,000 |
1,000 |
0,000 |
0,000 |
|
|
|
SIZE*ROA |
0,000 |
0,000 |
0,000 |
0,000 |
1,000 |
0,000 |
|
|
|
SIZE*DER |
0,000 |
0,000 |
0,000 |
0,000 |
0,000 |
1,000 |
|
|
Source: Processed WarpPLS output by Researchers (2023)
Based
on table 4.4 show that mark factor
loading From each variable in
this research, the result was that all variables obtained a loading factor
value of 1 or greater than 0.7. This value meets the requirements of the reliability indicator so it can be
interpreted that the data is valid.
The
convergent test can also be seen from the Average
Variance Extracted value (AVE), if If mark AVE > 0.50 so construct has good convergent validity. The following are the results of the Average Variance Extracted (AVE) value
as follows:
Table 4. Average
Values Variance Extracted
(AVE)
|
ROA |
DER |
CETR |
SIZE |
SIZE*ROA |
SIZE*DER |
|
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
Source: Outputs
WarpPLS Processed by Researcher (2023)
Based
on table 4.5, it can be seen that the Average
Variance Extracted value (AVE) from variable profitability Which proxy with ROA
(X 1 ), leverage
which is proxied by DER (X 2 ), tax avoidance proxy with CETR (Y), And size company
Which proxied with SIZE (Z), each every variable
obtain mark AVE is 1. So, this value meets the
provisions of convergent validity,
namely by having an AVE value greater than 0.50. So it can be interpreted that
the results of the convergent validity test have
met the regulatory requirements and it can be stated that the data is
valid.
The
discriminant validity test can be seen based on the cross loading value for each variable which must be > 0.70. To
be able to meet the criteria for the discriminant validity test, the cross loading value must be greater
than the values of the other variables.
|
|
ROA |
DER |
CETR |
SIZE |
SIZE* ROA |
SIZE* DER |
|
ROA |
1,000 |
-0.105 |
-0.148 |
-0.145 |
-0.828 |
0.127 |
|
DER |
-0.105 |
1,000 |
0.169 |
0.214 |
0.068 |
-0.452 |
|
CETR |
-0.148 |
0.169 |
1,000 |
-0.078 |
0.085 |
-0.109 |
|
SIZE |
-0.145 |
0.214 |
-0.078 |
1,000 |
0.115 |
-0.492 |
|
SIZE*ROA |
-0.828 |
0.068 |
0.085 |
0.115 |
1,000 |
-0.171 |
|
SIZE*DER |
0.127 |
-0.452 |
-0.109 |
-0.492 |
-0.171 |
1,000 |
Source: Outputs WarpPLS Processed by Researcher (2023)
Based
on table 4.6, it shows that each variable in the research this own mark cross loading more
big than other variables. So it can be concluded
that the results of the discriminant validity test have met the regulatory requirements and it can be stated that the
data is valid.
c. Reliability Test (Reliability Validity)
This
reliability test was carried out to prove the consistency, accuracy and
precision of the instrument in measuring the construct. The reliability test
can be measured by two criteria, namely composite
reliability and Cronbach's alpha with
a value greater than 0.70. The following are the results of the composite reliability and Cronbach's alpha values in this research:
Table 6. Test Composite Reliability
|
|
Composite Reliability |
Cronbach's Alpha |
|
ROA |
1,000 |
1,000 |
|
DER |
1,000 |
1,000 |
|
CETR |
1,000 |
1,000 |
|
SIZE |
1,000 |
1,000 |
Source: Outputs WarpPLS Processed by Researcher (2023)
Based
on table 6, can seen that mark composite
reliability and Cronbach's
alpha own mark 1 Which It
means lower mark it has fulfil
condition provision that is
must more big from 0.7. So
it can be concluded that all variables are declared reliable.
3. Testing Model Structural (Inner Model)
Evaluation model
structural (inner models) that
is explain the influence of the independent latent variable on the
dependent latent variable with two stages that
is coefficient determination (R2) and cross-validated redundancy (Q2).
a.
Coefficient
Determination (R2)
The
coefficient of determination (R 2) is used to show how much far contribution variable
latent independent capable
explains the dependent latent variable. The coefficient of determination
(R2) can be seen from the R-Square
value (R2).
Table 7. Results Test Coefficient Determination (R2)
|
|
Mark R-Square
(R 2 ) |
Mark Adjusted
R 2 |
|
CETR |
0.219 |
0.162 |
Source: Outputs
WarpPLS Processed by Researcher (2023)
Based
on table 4.8, it can be seen that the R-Square
(R2) value is 0.219, indicating that the model is weak. This
means that tax avoidance (Y) can be explained by the variables profitability (X 1 ), leverage
(X 2
) and company size (Z) of 21.9%, while
the remaining 78.1% is influenced by other variables not examined in this
research.
b.
Cross-Validated Redundancy (Q2)
Q
value 2 used to measure
how well the structural model observation results are and can also estimate the
parameters. If the Q value is 2 >
than 0, then the model has predictive relevance.
Table 8. Mark Cross Test Validated Redundancy (Q 2 )
|
|
Q2 |
|
CETR |
0.239 |
Source: Outputs WarpPLS Processed by Researcher (2023)
Based
on table 4.9 show that mark avoidance
tax (Y) Which proxied CETR own mark Q
2 as big as 0.239.
Matter it means that mark avoidance tax own mark predictive relevance because the value
of Q 2 > 0.
4. Hypothesis
test
Hypothesis
testing in this research was carried out by means of influence testing direct and test influence No direct. Test influence directly used to see the effect of
profitability on tax avoidance and the effect of leverage on tax avoidance. Meanwhile, the indirect effect test is
used to determine the moderation of company size on the effect of profitability
on tax avoidance and the moderation of company size on the effect of leverage on avoidance Tax. Test influence direct and test influence No It
can be seen directly from the path
coefficient value and p-value. Following
are the results of the hypothesis test influence direct and influence
No direct in this
research:
Figure 1. Hypothesis
Testing
Source: Outputs WarpPLS Processed by Researcher (2023)
Based
on Figure 1, it can be seen that the results of testing the first hypothesis,
namely profitability (ROA) against tax avoidance (CETR), obtained a p-value of <0.001 with a path coefficient value. As big as -0.403. Matter this show that profitability has a significant negative effect on tax
avoidance so that H 1 rejected.
Testing
the second hypothesis, namely leverage (DER)
on tax avoidance (CETR), obtained a p-value
of 0.130, with a path coefficient
value of 0.140. This shows that leverage has no effect on tax avoidance so H 2 rejected.
Testing hypothesis third that is moderation size company (SIZE) on influence profitability to avoidance tax obtain the p-
value is 0.455, with a path
coefficient value of 0.015. This shows that company size cannot moderate
the effect of profitability on tax
avoidance so that H 3 is
rejected.
Testing
the fourth hypothesis, namely the moderation of company size (SIZE) on the
effect of leverage on tax avoidance,
obtains value p-value as big as 0.217,
with mark path coefficient as big as -0.098. This shows that company size cannot
moderate the effect of leverage on tax avoidance so that H 4 is rejected.
5. Discussion
a. Influence Profitability to Avoidance Tax
Based
on the test results on the hypothesis, it shows that the significance value is
<0.001 <0.05 with a path
coefficient value of -0.403. So it can be stated that the research results
on the hypothesis in this study which states that profitability has a significant positive effect on tax
avoidance (H 1
) is
rejected.
This
can show that the better the company's profitability, the more mature the
company's tax planning will be so that a company's ability to manage its
capital is good and can produce optimal profits, this is because if a company
has a level of profitability Which tall, so trend company to do avoidance tax even will the
more decrease because the company is able to pay the tax burden owed.
The
results of this research are in line with research conducted by (Suyanto & Kurniawati, 2022) and
(W. W. Hidayat, 2018) states
that profitability has a negative effect on tax avoidance. However, this
research is not in line with research conducted by (Wahyuni & Wahyudi,
2021) and (Mahdiana & Amin, 2020) stating that profitability has a positive
effect on tax avoidance.
b. The Effect of
Leverage on Tax Avoidance
Based
on the test results on the hypothesis, it shows that the significance value is
0.130 > 0.05 with a path coefficient
value of 0.140. So it can be stated that the research results on the
hypothesis in this study which states that leverage
has a significant positive
effect on tax avoidance (H 2 ) is rejected.
This
shows that the higher or lower the level of leverage
in a company has no effect on tax avoidance carried out by the company.
This is because the company does not use the debt to reduce the tax burden owed
and the company becomes more careful about the debt it has because the debt it
has will give rise to burden flower Which can cause amount the debt that the company must pay
becomes increasingly large. As a result, the company will experience losses if
it is unable to pay off its debts. However, in the companies that were sampled
in the research this own debt period
long which small
so that the interest burden on
the resulting long-term debt is also low so it is a burden flower
No give influence against tax avoidance.
The
results of this research are in line with research conducted by (Manurung,
2020) and (Putri & Putra, 2017) which stated that leverage has no effect on tax avoidance. However, this research is
not in line with research conducted by (Walidayni, 2022) and (Apriliyani &
Kartika, 2021) which states that leverage
has a positive effect on tax avoidance.
c. The Moderated
Effect of Profitability on Company Size on Tax Avoidance
Based
on the results of hypothesis testing, it shows that the significance value is
0.455 > 0.05 with a path coefficient
value of 0.015. So it can be stated that the research results on the
hypothesis in this study which states that company size moderates the effect of
profitability on tax avoidance (H 3 ) is rejected.
Matter this show that company which
own If profitability is high,
the company's ability to earn profits and assets will be better. Large
companies will find it easier to generate profits, therefore companies are less
likely to engage in tax avoidance and will be more likely to comply with their
tax obligations. The larger the company size, the company's operations in
generating profits will increase and the tax burden will also increase.
d. The Moderated
Effect of Leverage on Company Size on Tax Avoidance
Based
on the results of testing the hypothesis, it shows that the significance value
is 0.217 > 0.05 with a path
coefficient value of -0.098. So it can be stated that the research results
of the hypothesis in this study which states that company size moderates the
effect of leverage on tax avoidance (H 4 ) is rejected. Matter This show that big small
size something The company is often associated with the
size of the debt the company has. So companies that have a high level of leverage will certainly not avoid tax,
this is because as company debt increases, company management becomes more
careful in taking risks to avoid tax when carrying out financial reporting.
CONCLUSION
Based on the results of the first hypothesis
test, profitability has a significant negative effect on tax avoidance in
Manufacturing Companies in the Various Industrial Sector for the 2017-2021
period. This is because if a company has high profitability, the company's
tendency to avoid taxes will decrease because the company is able to pay the
tax burden owed.
In the results of the second hypothesis test,
leverage has no effect on tax avoidance in Manufacturing Companies in the
Various Industrial Sector for the 2017-2021 period. This is because the company
does not use the debt to reduce the tax burden owed. However, companies are
becoming more careful about the debt they have because the debt they have will
give rise to interest charges which can cause the amount of debt the company
has to pay to become even greater.
In the results of the third hypothesis test,
company size cannot moderate the effect of profitability on tax avoidance in
Manufacturing Companies in the Various Industrial Sector for the 2017-2021
period. This is because a company that has high profitability means the
company's ability to earn profits and its assets will be better. So it is
easier for large companies to generate profits and is less likely to engage in
tax avoidance and will be more likely to comply with their tax obligations.
In the results of the fourth hypothesis test,
company size cannot moderate the effect of leverage on tax avoidance in
Manufacturing Companies in the Various Industrial Sector for the 2017-2021
period. This is because the size of a company is often related to the size of
the debt the company has. So, with increasing company debt, company management
becomes more careful in taking risks to avoid taxes when carrying out financial
reporting.
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