HOW TO DETECT TAX AVOIDANCE THROUGH FINANCIAL STATEMENTS
Andi Dajen Nurfadhillah
PPM School of Management
andifadhil26[at]gmail.com
Abstract
1. INTRODUCTION The tax is a levy from the government aimed at taxpayers according to the law, and the levy is coercive that aims to cover state expenditure and the cost of developing the country and the community does not get reciprocal services directly (Darmawan et al, 2014). Taxes are a source of income for the state, whereas for companies, taxes are a burden that will reduce the companys net profit. Differences in the interests of the tax authorities who want large and continuous tax revenues are certainly contrary to the interests of companies that want minimum tax payments (Kurniasih et al, 2013). In this paper, we discuss how to detect tax avoidance treatment through financial statements using the profitability, leverage, firm size proxy, and tax avoidance measured using Cash Effective Tax Rate (CETR). This paper also using data from mining companies listed on the Indonesia Stock Exchange in the period 2013 to 2018. The selection of this period was carried out to interpret the latest situation. 2. METHODS This research uses the secondary data that obtained from the Indonesia Stock Exchange which is can be accessed through www.idx.co.id. The population used in this research is mining sector companies listed on the Indonesia Stock Exchange in the 2013-2018 period, amounting to 49 companies. The sampling technique in this study uses purposive sampling, which is a data collection technique that uses certain criteria. For processing the data using assistance from the Statistical Product and Service Solution (SPPS) version 20 program. 3. RESULTS After applying purposive sampling, 8 companies were found that fit the existing criteria. After running the test with the help of SPSS 20, the test results In the t test results for profitability, it shows a significance value of 0.493> 0.05 (p value) so that it can be concluded that profitability has no significant effect on tax avoidance (with a significance value <5%). That is, changes in the value of profitability do not affect the companys decision to avoid tax. And as for leverage, shows a significance value of 0.053> 0.05 (p value), but the difference of 0.05 is not significant. So it can be concluded that leverage has a negative and significant effect on tax avoidance. In other words, if the value of leverage goes up, the value of CETR will go down, which means the lower the value of CETR the more the company indicates in avoiding taxes. It can be concluded that, companies that have high leverage value, tend to avoid tax. And as for firm size, shows the coefficient value of -0.542, which means that company size has a negative effect on tax avoidance. In the t test results table also shows that the significance value of 0.08 <0.1 (p value), so it can be said that the size of the company has a negative effect but not too significant for tax avoidance. In other words, the greater the value of company size, the lower the CETR value. Which means, the lower the CETR value, th
Keywords: Profitability, Leverage, Firm Size, Tax Avoidance (CETR)
Topic: Cost Management and Accounting Management