Analysis of Profitability and Sales Growth on Tax Avoidance with Company Size as a Moderating Variable

Abstract

This study aims to analyze the effect of profitability and sales growth on Tax Avoidance, with firm size as a moderating variable in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2020–2024 period. This research employs a quantitative approach using a purposive sampling method. The sample consists of 24 companies with a total of 120 observations. The data used are secondary data obtained from companies’ annual financial statements. The data analysis methods applied are panel data regression and Moderated Regression Analysis (MRA). The results indicate that profitability has no effect on Tax Avoidance, while sales growth has a negative effect on Tax Avoidance. Furthermore, firm size is proven to moderate the relationship between the independent variables and Tax Avoidance, where firm size strengthens the effect of profitability on Tax Avoidance, but weakens the effect of sales growth on Tax Avoidance. These findings suggest that Tax Avoidance practices are not only influenced by a company’s financial performance but also by firm characteristics, such as firm size, in determining tax policies