THE DETERMINANTS OF TAX AGGRESSIVENESS: FIRM SIZE ROLE OF MODERATION

Abstract

ABSTRACT
This research reviews the factors that encourage tax aggressiveness. Given the large role of taxes for the state, understanding the factors that encourage tax aggressiveness is very important in developing more effective tax policies. Tax aggressiveness is an interesting topic for the
government and society because a lot of companies have to look out for the challenge that can be able to optimize increasing profits while minimizing the burden of taxes by taking aggressive tax planning actions. The research objective is to analyze whether profitability, leverage, capital
intensity, and managerial ownership could affect tax aggressiveness by considering the firm size role of moderation. The novelty of this research lies in selecting the period under research and in utilizing variables unexamined simultaneously in previous research on the topic of aggressiveness in taxes. By using the firm size for moderating variable, the present research provides a new approach to analyzing whether firm size can be moderating independent variables that could affect tax aggressiveness. This research applies a quantitative approach and takes data secondary of financial and annual reports from sub-sector food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2021-2023. Sample of 57 observations were obtained through purposive sampling method. The data were analyzed through descriptive statistics, classic assumption tests, coefficient of determination (R2), goodness of fit test (F-test), t-test, and moderation regression (MRA) using SPSS 29. Testing results from the research indicate that profitability is not significantly influential on tax aggressiveness. However, capital intensity and leverage are negatively and significantly influential on tax aggressiveness, while managerial ownership is positively and significantly
influential on tax aggressiveness. Firm size is not capable of moderating profitability influential on tax aggressiveness. However, firm size weakens capital intensity and leverage influential on tax aggressiveness and strengthens managerial ownership influential on tax aggressiveness.
Keywords: Tax Aggressiveness, Profitability, Leverage, Capital Intensity, Managerial Ownership, Firm Size.