THE EFFECT OF PROFITABILITY, LEVERAGE, CAPITAL INTENSITY, AND MANAGERIAL OWNERSHIP ON TAX AVOIDANCE

Abstract

This study aims to examine the effect of profitability, leverage, capital intensity, and managerial ownership on tax avoidance. The method used in this study is quantitative using secondary data from the financial statements of basic materials companies listed on the Indonesia Stock Exchange during the 2021-2024 period. The sampling method in this study used purposive sampling with a total sample of 37 companies consisting of 128 data observations. This study utilized panel data regression analysis processed using Eviews version 13. The results obtained from this study indicate that profitability has a negative effect on tax avoidance. Companies with high profitability have greater financial capacity to fulfill their tax obligations, thus lowering tax avoidance practices. Leverage has a positive effect on tax avoidance, indicating that a higher level of debt utilization increases the company's tendency to engage in tax avoidance through the use of interest expenses as a deduction from taxable income. Capital intensity has a positive effect on tax avoidance, meaning that higher investment in fixed assets generates greater depreciation expenses, which can reduce taxable income. However, managerial ownership has no effect on tax avoidance, indicating that the proportion of shares owned by management does not influence the company's tendency to engage in tax avoidance.