The Effect of Corporate Governance and Fixed Asset Intensity on Tax Avoidance (A Study) Empirical In Manufacturing Companies (on The Indonesian Stock Exchange)

Nuridz Dzatiwa Ihwabas; La  Ane

doi:10.63922/ijbqr.v4i03.5893

Nuridz Dzatiwa Ihwabas Fakultas Ekonomi Dan Bisnis, Universitas Negeri Medan
La Ane Fakultas Ekonomi Dan Bisnis, Universitas Negeri Medan

DOI: https://doi.org/10.63922/ijbqr.v4i03.5893

Keywords: Corporate Governance, Tax Avoidance, Fixed Asset Intensity, Manufacturing Companies

Abstract

Tax avoidance is a strategy employed by companies to legally minimize tax expenses by taking advantage of applicable tax regulations. This practice is influenced by several factors, including corporate governance mechanisms and fixed asset intensity. This study aims to examine the effect of independent commissioners, audit committees, institutional ownership, managerial ownership, and fixed asset intensity on tax avoidance. The study is expected to provide empirical evidence regarding the factors influencing tax avoidance practices in food and beverage manufacturing companies. The population of this study consisted of food and beverage manufacturing companies listed on the Indonesia Stock Exchange during the 2023–2025 period. The sample was selected using a purposive sampling technique, resulting in 33 companies with a total of 99 observations. This study employed secondary data obtained from the companies' annual reports and financial statements. The data were analyzed using descriptive statistics, classical assumption tests, multiple linear regression analysis, and hypothesis testing with the assistance of SPSS version 25. The results indicate that independent commissioners, institutional ownership, and managerial ownership have a negative and significant effect on tax avoidance. In contrast, the audit committee and fixed asset intensity do not have a significant effect on tax avoidance. Simultaneously, all independent variables significantly affect tax avoidance. The Adjusted R Square value of 0.691 indicates that 69.1% of the variation in tax avoidance can be explained by the research model, while the remaining 30.9% is explained by other factors outside the model. Based on the findings, it can be concluded that effective corporate governance plays an important role in reducing tax avoidance practices. Independent commissioners, institutional ownership, and managerial ownership have proven to function as effective monitoring mechanisms in enhancing corporate tax compliance. The findings are expected to provide useful insights for companies, investors, and regulators in strengthening corporate governance practices. Future research is recommended to expand the research scope, extend the observation period, and incorporate additional variables to obtain more comprehensive findings

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