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Journal of Economics, Management, Entrepreneurship, and Business Abnus Publisher

Effect of Profitability, Leverage and Capital Intensity on Effective Tax Rate LQ45 Companies Indonesia 2016-2019

2023-05-30
Published
1-17
Pages
OPEN
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SN
Siti Alya Nabilla
Accounting, Institute of Banking Finance and Informatics Asia Perbanas
JS
Josua Panatap Soehaditama
Accounting, Institute of Banking Finance and Informatics Asia Perbanas
Abstract

Purpose: This study was conducted to determine the impact of profitability, leverage, and capital intensity on the effective tax rate in LQ45 companies on the Indonesia Stock Exchange (IDX).

Research Methodology: This study uses data derived from the economic report of the LQ45 companies listed on the Indonesia Stock Exchange (IDX) for the 2016–2019 period. This study uses quantitative methods, and the data obtained will be in the form of numbers.

Results: The results of this study are the discovery of negative and substantial profitability impacts on the effective tax rate, found negative and substantial impacts of leverage on the effective tax rate, and no impact of capital intensity on the effective tax rate on LQ45 companies on the Indonesia Stock Exchange (IDX) for the period 2016–2019.

Conclusions: This study examines the impact of profitability, leverage, and capital intensity on the effective tax rate (ETR) in LQ45 companies on the Indonesia Stock Exchange (IDX) for the period 2016–2019. The findings show that profitability and leverage have a significant negative effect on the ETR, while capital intensity does not influence the ETR. These results provide valuable insights for corporate tax management and strategic decision-making.

Limitations: This study is limited to LQ45 companies on the Indonesia Stock Exchange, which may not fully represent companies from other sectors or countries. Additionally, the study uses secondary data from financial reports, which may limit the scope of analysis. The cross-sectional design also restricts the ability to examine long-term trends or causal relationships.

Contributions: This study contributes to the understanding of how financial variables such as profitability, leverage, and capital intensity affect the effective tax rate in publicly traded companies. The findings offer valuable insights for tax planning and corporate financial strategy, especially for companies in emerging markets like Indonesia.

Capital Intensity Effective Tax Rate Leverage Profitability
How to Cite
Nabilla, S. A., & Soehaditama, J. P. (2023). Effect of Profitability, Leverage and Capital Intensity on Effective Tax Rate LQ45 Companies Indonesia 2016-2019. Journal of Economics, Management, Entrepreneurship, and Business, 3(1), 1-17. https://doi.org/10.52909/jemeb.v3i1.113
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How to Cite

Nabilla, S. A., & Soehaditama, J. P. (2023). Effect of Profitability, Leverage and Capital Intensity on Effective Tax Rate LQ45 Companies Indonesia 2016-2019. Journal of Economics, Management, Entrepreneurship, and Business, 3(1), 1-17. https://doi.org/10.52909/jemeb.v3i1.113
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