The Effect of Leverage, Sales Growth, and Capital Intensity on Tax Avoidance

Abstract

This study examines the effects of leverage, sales growth, and capital intensity on tax avoidance in food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2019–2023. Fourteen companies were selected by purposive sampling, yielding 70 firm-year observations. Tax avoidance is measured by the cash effective tax rate (CETR), for which a lower value indicates more tax avoidance. The data were analyzed with multiple linear regression in SPSS version 26. Leverage has a significant positive effect on CETR, indicating that more highly leveraged companies engage in less tax avoidance. Sales growth has a significant negative effect on CETR, indicating that faster-growing companies engage in more tax avoidance. Capital intensity has no significant effect at the 5% level.