Leverage, Capital Intensity, and Institutional Ownership as Determinants of Tax Avoidance in Indonesian Manufacturing Firms

DOI

10.2991/978-94-6239-709-5_180How to use a DOI?

Keywords

Tax Avoidance; Leverage; Capital Intensity Ratio; Institutional Ownership; IDX

Abstract

This study investigates the impact of leverage, capital intensity, and institutional ownership on tax avoidance in manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2022. Using multiple linear regression analysis, tax avoidance was assessed through the Effective Tax Rate (ETR). The results indicate that leverage significantly affects tax avoidance, with a p-value of 0.0010, suggesting that higher leverage leads to greater tax avoidance, as companies use debt interest payments to reduce taxable income. In contrast, the capital intensity ratio does not significantly influence tax avoidance, with a p-value of 0.0743, indicating that capital investment does not play a major role in reducing taxes. Institutional ownership, however, shows a significant positive effect on tax avoidance, with a p-value of 0.0025. This suggests that companies with higher institutional ownership are more likely to engage in tax avoidance strategies, likely due to increased pressure from institutional investors. The findings emphasize that while leverage and institutional ownership significantly contribute to tax avoidance, capital intensity does not have a substantial impact. This study offers valuable insights into the financial and governance factors influencing tax behavior in Indonesian manufacturing firms.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - M. Ali Harpa
AU  - Syarifuddin Rasyid
PY  - 2026
DA  - 2026/06/20
TI  - Leverage, Capital Intensity, and Institutional Ownership as Determinants of Tax Avoidance in Indonesian Manufacturing Firms
BT  - Proceedings of the 10th International Conference on Accounting, Management, and Economics (10th ICAME 2025)
PB  - Atlantis Press
SP  - 2590
EP  - 2602
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-709-5_180
DO  - 10.2991/978-94-6239-709-5_180
ID  - Harpa2026
ER  -