The Effect of Leverage, Profitability and Company Size on Tax Avoidance (An Empirical Study on Mining Sector Companies Listed on Indonesia Stock Exchange Period 2013-2019)

Abstract

The interests of tax authorities who want to earn large continuous tax revenues are in contrast to the interests of companies that want to pay as little tax as possible. In addition, the phenomenon of differences in interests between taxpayers and the government, and the average tax ratio that has not reached the target can indicate tax avoidance activities. This study aims to determine the relationship between the effect of leverage, profitability and company size on tax avoidance in mining sector companies listed on the Indonesian stock exchange for the period 2014-2018. The factors tested in this study are leverage, profitability and firm size as independent variables; and tax avoidance as the dependent variable. The research method used in this research is explanatory and descriptive research methods. The population in this study were 47 mining sector companies. The data used are financial reports from a total sample of 21 companies in the mining sector. The results showed that leverage and company size have an effect on tax avoidance, while profitability has no effect on tax avoidance. For further research, this study suggests adding research model variables that have an influence on tax avoidance.