Understanding the financial determinants for tax avoidance in the telecommunications sector is crucial, particularly as profitability can affect how companies manage their taxes. Therefore, this research study aims to explore the relationship between financial drivers such as capital intensity (CI), sales growth (SG), and leverage (LEV) on tax avoidance (TA), as well as examining the moderating role of profitability (PRO). The dependent variable, tax avoidance, is determined by the effective tax rate. Capital intensity, sales growth, and leverage are the independent variables. The study uses return on assets (ROA) as a moderating variable that represents profitability. The study used quantitative secondary data that was gathered from the 2010–2023 annual reports of four telecom firms that were listed on Bursa Malaysia. A purposive sampling technique was used to collect data from the company's annual reports. OLS regression was used in the study in addition to the fixed effect method (FEM). The study findings revealed that capital intensity and leverage are important factors in determining tax avoidance. Similarly, profitability strongly moderates the association between capital intensity and tax avoidance based on the findings for the moderation effect. Agency theory, which indicates that there exist conflicts of interest between the government (principal) and businesses or taxpayers (agents), validates the findings of this study. The findings of this study can help companies make decisions about improved policies related to corporate tax avoidance and also help the firms to determine important factors that help in reducing their tax burden.
Afrianti, F., & Uzliawat, L. (2022). The Effect Of Leverage, Capital Intensity, And Sales Growth On Tax Avoidance With Independent Commissioners As Moderating Variables (Empirical Study On Manufacturing Companies Listed On The Indonesia Stock Exchange In 2017-2020). International Journal of Science, Technology & Management, 3(2), 337-348. DOI: 10.46729/ijstm.v3i2.441.
Almira, N. P. A. K., & Wiagustini, N. L. P. (2020). Return On Asset, Return On Equity, Dan Earning Per Share Berpengaruh Terhadap Return Saham. E-Jurnal Manajemen Universitas Udayana. https://doi.org/10.24843/ejmunud.2020.v09.i03.p13
Alsaadi, A. (2020). Financial-tax reporting conformity, tax avoidance and corporate social responsibility. Journal of Financial Reporting and Accounting, 18(3), 639–659. https://doi.org/https://doi.org/10.1108/JFRA-10-2019-0133.
Annisa, M. L. A., Kertarajasa, A. Y., Hamzah, R. S., Gozali, E. O. D., & Sitepu, C. D. S. (2023). The analysis of influence growth sales and fixed asset intensity on tax avoidance. Enrichment: Journal of Management, 13(2), 1595-1605. https://doi.org/10.35335/enrichment.v13i2.1488
Aprianti, I. A., Nazier, D. M., & Umiyati, I. (2024). Effect of Profitability, Leverage, and Fixed Asset Intensity on Tax Avoidance. Journal of Taxation Analysis and Review, 4(2), 45-52. https://doi.org/10.35310/jtar.v4i2.1226.
Bivianti, V., & Yuniarsih, N. (2022). The Effect of Executive Characteristics, CEO Overconfidence, Capital Intensity on Tax Avoidance. URL: http://repositori.ukdc.ac.id/id/eprint/1418
Darsani, P. A., & Sukartha, I. M. (2021). The effect of institutional ownership, profitability, leverage and capital intensity ratio on tax avoidance. American Journal of Humanities and Social Sciences Research (AJHSSR), 5(1), 13-22.
Dharma, N. B. S., & Noviari, N. (2017). Pengaruh Corporate Social Responsibility Dan Capital Intensity Terhadap Tax Avoidance. E-Jurnal Akuntansi Universitas Udayana, 18, 529–556.
Elen, T., Prihatini, D., & Utami, Y. M. (2024). The Effect of Corporate Social Responsibility, Profitability, and Leverage on Tax Aggressiveness. International Journal of Accounting, Management, Economics and Social Sciences (IJAMESC), 2(3), 928-938. https://doi.org/10.61990/ijamesc.v2i3.257.
Fahmi, I. (2014). Analisis Laporan Keuangan (Keempat).
Haloho, Y. W. Y. B., & Rahmadhani, S. (2024). The effect of leverage, profitability, company size, proportion of institutional ownership, and corporate social responsibility on tax planning. Jurnal Mantik, 8(2), 986-996. https://doi.org/10.35335/mantik.v8i2.5405.
Ichsani, S., & Susanti, N. (2019). The effect of firm value, leverage, profitability and company size on tax avoidance in companies listed on index LQ45 period 2012-2016. Global Business and Management Research: An International Journal, 11(1), 307–316.
Kalbuana, N., Solihin, S., Yohana, Y., & Yanti, D. R. (2020). The influence of capital intensity, firm size, and leverage on tax avoidance on companies registered in Jakarta Islamic index (Jii) period 2015-2019. International Journal of Economics, Business and Accounting Research (IJEBAR), 4(03).
Kalbuana, N., Solihin, Saptono, Yohana, & Yanti, D. R. (2020). The Influence Of Capital Intensity , Firm Size , And Leverage On Tax Avoidance On Companies Registered In Jakarta Islamic Index ( Jii ) Period 2015-2019. International Journal of Economics, Business and Accounting Research (IJEBAR), 2020(3), 272–278
Kennedy, N. A. dan A. R. S. (2013). Faktor-Faktor yang Mempengaruhi Struktur Modal pada Perusahaan Real Estate and Property yang Go Public di Bursa Efek Indonesia. Jurnal Akuntansi, 1–10.
Khan, M. J., Saleem, F., Ud Din, S. Khan, M. Y. (2024). Nexus between boardroom independence and firm financial performance: evidence from South Asian emerging market. Humanities and Social Sciences Communication. 11, 590. https://doi.org/10.1057/s41599-024-02952-3.
Kholifah, N. A. (2023). Effect of Sales Growth, Profitability, Firm Size and Leverage on Tax Avoidance:(Case Study of Automotive Companies on the Indonesia Stock Exchange 2017–2021). In Journal of World Conference (JWC) (Vol. 5, No. 3, pp. 150-156).
Krishnan, T. V., Feng, S., & Jain, D. C. (2023). Peak sales time prediction in new product sales: Can a product manager rely on it? Journal of Business Research, 165(June 2021), 114054. https://doi.org/10.1016/j.jbusres.2023.114054
Monika, C. M., & Noviari, N. (2021). The effects of financial distress, capital intensity, and audit quality on tax avoidance. American Journal of Humanities and Social Sciences Research (AJHSSR), 5(6), 282-287.
Nailufaroh, L., Suprihatin, N. S., & Mahardini, N. Y. (2022). The impact of leverage, managerial ownership, and capital intensity on tax avoidance. Jurnal Keuangan dan Perbankan (KEBAN), 1(2), 35-46.
Nawaz, H. M., Ahmad, A., Tahir, M., Saleem, F., Ullah, Z., Khan, N., Raza, W. (2022). The Dynamics of Audit Committee Characteristics, External Audit Quality, and Firm Performance. Evidence from Firms Listed In Pakistan Stock Exchange. Journal of Positive School Psychology. 6(12). 2374-2391.
Nazeer, R., Saleem, F., & ud Din, S. (2024). The Internal and External Determinants of Financial Performance: Evidence from Islamic and Conventional Banking Sector in Pakistan. Journal of Islamic Business and Management.14 (1), 69-85. https://doi.org/10.26501/jibm/2024.1401-006.
Nugrahadi, E. W., & Rinaldi, M. (2021). The Effect of Capital Intensity and Inventory Intensity on Tax Avoidance at Food and Beverage Subsector Companies Listed on the Indonesia Stock Exchange (IDX). In International Conference on Strategic Issues of Economics, Business and, Education (ICoSIEBE 2020) (pp. 221-225). Atlantis Press. 10.2991/aebmr.k.210220.039.
Putra, D. M., & Kirana, A. P. (2023). Impact of Leverage, Capital Intensity, Inventory Intensity, Cash Effective Tax Rate on Tax Avoidance: Assessment for Energy Sector Corporate. Atestasi: Jurnal Ilmiah Akuntansi, 6(2), 419-433. https://doi.org/10.57178/atestasi.v6i2.4.
Rodríguez, E. F., & Arias, A. M. (2012). Do Business Characteristics Determine an Effective Tax Rate?? Evidence for Listed Companies in China and the United States. The Chinese Economy, 45 no. 6, 60–83. https://doi.org/10.2753/CES1097- 1475450604.
Saleem, F. (2018). The Effect of Board Characteristics as Corporate Governance Attribute on Firm Performance in Pakistan. University of Wah Journal of Management Sciences, 2(2), 1-10.
Saleem, F., Afridi, S.G., Ahmad, K. (2022). The Relationship of Corporate Governance and Profitability with Corporate Social Responsibility Disclosure in Pakistan. Journal of Business and Tourism, 8(2), 1-17. https://doi.org/10.34260/jbt.v8i02.245.
Sarwono, J. (2016). Prosedur-Prosedur Analisis Populer Aplikasi Riset Skripsi dan Tesis dengan Eviews. Yogyakarta: Gava Media.
Sehrish, S., Saleem, F., Yasir, M., Shehzad, F., & Ahmed, K. (2012). Financial performance analysis of Islamic banks and conventional banks in Pakistan: A comparative study. Interdisciplinary Journal of Contemporary Research Business, 4(5), 186-200.
Setyaningsih, F., Nuryati, T., Rossa, E., & Machdar, N. M. (2023). Pengaruh Profitabilitas, Leverage, dan Capital Intensity terhadap Tax Avoidance. SINOMIKA Journal: Publikasi Ilmiah Bidang Ekonomi Dan Akuntansi, 2(1), 35-44. https://doi.org/10.54443/sinomika.v2i1.983.
Suciarti, C., Suryani, E., & Kurnia, K. (2020). The effect of leverage, capital intensity and deferred tax expense on tax avoidance. Journal of Accounting Auditing and Business, 3(2). https://doi.org/10.24198/JAAB.V3I2.28624
Sugeng, S., Prasetyo, E., & Zaman, B. (2020). Does capital intensity, inventory intensity, firm size, firm risk, and political connections affect tax aggressiveness?. JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manejemen, 17(1), 78-87. http://dx.doi.org/10.31106/jema.v17i1.3609
Sugeng., E. P., & Zaman, B. (2020). Does Capital Intensity, Inventory Intensity, Firm Size, Firm Risk, and Political Connection Affect Tax Aggresiveness? Accounting Journal, 17(1), 78–87.
Sumantri, F. A., Kusnawan, A., & Anggraeni, R. D. (2022). The effect of capital intensity, sales growth, leverage on tax avoidance and profitability as moderators. Primanomics: Jurnal Ekonomi & Bisnis, 20(1), 36-53. https://doi.org/10.31253/pe.v20i1.861
Tarmidi, D. (2021). Mining Company Tax Minimization : Analysis of Internal and External Roles. International Journal of Management Studies and Social Science Research, 3(4), 168–174
Ud Din, S., Khan, W., Saleem, F., Khan, M. Y. (2024). CEO Duality, Board Independence and Firm Financial Performance: Evidence from an Asian Emerging Market. Sarhad Journal of Management Sciences, 10(1), 59-78.
Utami, F., & Supriadi, A. (2023). Size Of Company, Return On Assets And Leverage On Tax Avoidance. J-MAS (Jurnal Manajemen dan Sains), 8(1), 851-856.
Wahab, E. A. A., Ariff, A. M., Marzuki, M. M., & Sanusi, Z. M. (2017). Political Connections, Corporate Governance, and Tax Agressiveness in Malaysia. Asian Review of Accounting, 25(3), 424– 451.
Widyastuti, S. M., Meutia, I., & Candrakanta, A. B. (2022). The effect of Leverage, Profitability, Capital Intensity and Corporate Governance on Tax Avoidance. Integrated Journal of Business and Economics, 6(1), 13-27.
Wiguna, I. P. P., & Jati, I. K. (2017). Pengaruh Corporate Social Responsibility, Preferensi Risiko Eksekutif, dan Capital Intensity Pada Penghindaran Pajak. E-Jurnal Akuntansi Universitas Udayana, 21(1), 418–446.
Saleem, F. (2024). Financial Determinants of Tax Avoidance: Insight from the Telecom Sector with Profitability Moderation. International Journal of Academic Research in Business and Social Sciences, 14(10), 2726–2740.
Copyright: © 2024 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
