The Impact Of Size And Profitability On Corporate Effective Tax Rate

  • Indupurnahayu, Dedi Walujadi, Jumadil Saputra

Abstract

The main challenge for generations in the current global era is the issue of tax avoidance. The burden on the government from the fiscal side to allocate the budget, redistribute income and stabilize the economy is very dependent on income which is mainly sourced from taxes. Indonesia is one of the countries that believe that the strength of the market economy carried out by private companies can increase economic growth in conditions and stable and conducive political democracy. This study aims to examine some of the company's main performance indicators that are thought to influence the effective tax rate as a proxy for corporate tax avoidance. As empirical research data, 41 companies from 158 companies listed on the Indonesia Stock Exchange in 2017, were taken by simple random sampling. By using multiple linear regression models, the results show that company size positively and significantly influences the effective tax rate. While profitability has a negative and statistically significant effect on the effective tax rate. Empirically proven effective tax rate reduction occurs when companies experience increased profits.

Published
2020-05-16