Main Article Content
Abstract
This study examines tax avoidance in Indonesia’s construction sector, focusing on the influence of profitability, capital intensity, and sales growth. Using data from 15 publicly traded construction firms on the Indonesia Stock Exchange (2020–2022), multiple linear regression analysis was applied to assess the relationship between these financial factors and tax avoidance, measured by the Effective Tax Rate (ETR). The research utilizes quantitative techniques to examine information from 15 construction firms that are publicly traded on the Indonesia Stock Exchange during the period of 2020-2022. Multiple linear regression analysis was used to analyze the data and examine the correlation between profitability, capital intensity, sales growth, and tax avoidance represented by the effective tax rate(ETR). These findings highlight the need for stricter monitoring of asset-intensive firms, as they tend to exploit tax-saving opportunities. Policymakers should evaluate depreciation-related tax benefits to ensure fair tax contributions and introduce enhanced disclosure requirements for high-growth firms. Strengthening regulatory oversight can prevent aggressive tax planning and promote equitable tax compliance. Future research could explore the role of corporate governance and industry-specific tax incentives in shaping tax behavior. Expanding the analysis to other sectors and regions would provide a broader understanding of corporate tax strategies. Ultimately, this study underscores the importance of balancing tax efficiency with regulatory compliance to ensure fiscal sustainability and a fair tax system
Keywords
Article Details

This work is licensed under a Creative Commons Attribution 4.0 International License.
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
- Ali, S., Rangone, A., & Farooq, M. (2022). Corporate taxation and firm-specific determinants of capital structure: Evidence from the UK and US multinational firms. Journal of Risk and Financial Management, 15(2), 55.
- Aydoğmuş, M., & Gülay, G. (2022). Impact of ESG Performance on Firm Value and Profitability. Bursa Istanbul Review. https://doi.org/10.1016/j.bir.2022.11.006
- Blaufus, K., Reineke, J., & Trenn, I. (2023). Perceived tax audit aggressiveness, tax control frameworks and tax planning: an empirical analysis. Journal of Business Economics, 93(3), 509–557.
- Bosua, R., & Evans, N. (2024). Going digital: Developing social capital through online social networks in regional SMEs—An Australian study. Knowledge and Process Management, 31(1), 69–80. https://doi.org/10.1002/kpm.1765
- Chiadmi, M. S. (2021). Heteroscedasticity and Financial Contagion: Evidence from Some Islamic Stock Indexes. Academy of Accounting and Financial Studies Journal, 25(1), 1–14.
- Elvira, B. (2021). Pengaruh Profitabilitas dan Pertumbuhan Penjualan Terhadap Penghindaran Pajak pada Perusahaan Food and Beverage yang Terdaftar di Bursa Efek Indonesia Periode 2015-2019. Medan Area University.
- Faisal, M., Utama, S., Sari, D., & Rosid, A. (2023). Languages and conforming tax avoidance: The roles of corruption and public governance. Cogent Business & Management, 10(3), 2254017.
- Firdaus, M. (2020). Aplikasi Ekonometrika dengan E-Views, Stata, dan R (Elviana, Ed.; 1st ed.). IPB Press.
- Firdaus, M., Harmini, H., & MA, F. (2013). Aplikasi Metode Kuantitatif (P. Komalasari, Ed.; 2nd ed.). IPB Press.
- Gavious, I., Livne, G., & Chen, E. (2022). Does tax avoidance increase or decrease when tax enforcement is stronger? Evidence using CSR heterogeneity perspective. International Review of Financial Analysis, 84, 102325.
- Girasa, R. (2022). Federal Regulation of Virtual Currencies. In Regulation of Cryptocurrencies and Blockchain Technologies: National and International Perspectives (pp. 81–146). Springer.
- Gujarati, D., & Dawn, C. (2013). Dasar-dasar Ekonometrika Edisi 5 Buku 2 (Terjemahan Raden Carlos Mangunsong). Salemba Empat.
- Hofmann, B., Patel, N., & Wu, S. P. Y. (2022). Original sin redux: a model-based evaluation. Bank for International Settlements, Monetary and Economic Department.
- Hossain, M. S., Ali, M. S., Ling, C. C., & Fung, C. Y. (2024). Tax avoidance and tax evasion: current insights and future research directions from an emerging economy. Asian Journal of Accounting Research, 9(3), 275–292.
- Huang, C.-C., & Huang, S.-M. (2020). External and internal capabilities and organizational performance: Does intellectual capital matter? Asia Pacific Management Review, 25(2), 111–120. https://doi.org/10.1016/j.apmrv.2019.12.001
- Matute, J., Sánchez-Torelló, J. L., & Palau-Saumell, R. (2021). The influence of organizations’ tax avoidance practices on consumers’ behavior: The role of moral reasoning strategies, political ideology, and brand identification. Journal of Business Ethics, 174(2), 369–386.
- M.Firdaus. (2020). Aplikasi Ekonometrika dengan E-Views, Stata, dan R (Elviana, Ed.; 1st ed.). IPB Press.
- M.Firdaus, Harmini, & MA, F. (2013). Aplikasi Metode Kuantitatif (P. Komalasari, Ed.; 2nd ed.). IPB Press.
- Mokhtar, W. Y., Kusumastuti, R., & Wiralestari, W. (2024). Influence of Environmental Social Governance (ESG), Profitability and Capital Structure on Firm Value. International Journal of Multidisciplinary Approach Research and Science, 2(03), 1277–1293. https://doi.org/10.59653/ijmars.v2i03.971
- Moore, M., & Prichard, W. (2020). How can governments of low-income countries collect more tax revenue? Springer.
- Paramita, V. S., & Ali, A. (2023). Can Profitability Moderate the Impact of Green Investment, Corporate Social Responsibility, and Good Corporate Governance on Firm Value on the SRI-KEHATI Index? International Journal of Finance Research, 4(4), 320–338. https://doi.org/10.47747/ijfr.v4i4.1604
- Rabbi, F., & Almutairi, S. S. (2021). Corporate tax avoidance practices of multinationals and country responses to improve quality of compliance. International Journal for Quality Research, 21–44.
- Riani, R., & Rusydiana, A. S. (2022). An Evaluation of Scholarly Works of Tax Incentives in Indonesia: Bibliometric Analysis of Policy Learning. Accounting and Sustainability, 1(1).
- Saeed, M. (2023). Transfer Pricing and Profit Shifting: Evaluating the Effectiveness of OECD Guidelines in Curbing Tax Avoidance. Journal of Economic and Business Studies, 5(1).
- Salim, G. (2023). The influence of debt-to-equity ratio, capital intensity ratio, and profitability on effective tax rate in the tourism sector. Journal of Governance and Regulation, 12(1).
- Santini, A. L., & Indrayani, E. (2020). The Effect of Profitability, Liquidity, Leverage, Capital Intensity and Firm Size on Tax Aggressiveness With Market Performance As an Intervening Variable (Banking Companies Listed on Indonesia Stock Exchange in 2014-2018). Jurnal Ilmiah Ekonomi Bisnis, 25(3), 290–303.
- Sebele-Mpofu, F., Mashiri, E., & Schwartz, S. C. (2021). An exposition of transfer pricing motives, strategies and their implementation in tax avoidance by MNEs in developing countries. Cogent Business & Management, 8(1), 1944007.
- Shams, S., Bose, S., & Gunasekarage, A. (2022). Does corporate tax avoidance promote managerial empire building? Journal of Contemporary Accounting & Economics, 18(1), 100293.
- Sugiyono, P. (2017). metode penelitian bisnis: kuantitatif, kualitatif, kombinasi dan R&D. CV Alfabeta, Bandung.
- 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.
- Traini, S., Goldman, N. C., & Lewellen, C. M. (2024). Aggressive tax planning and labor investments. Journal of Accounting, Auditing & Finance, 39(3), 697–725.