Corporate Tax Behavior and Financial Characteristics: Evidence from Indonesian Consumer Non-Cyclical Firms

Abstract

Corporate tax behavior reflects how firms balance tax compliance, financial strategies, and governance considerations. This study examines the association between ownership structure, capital structure, profitability, and corporate tax behavior measured through the Cash Effective Tax Rate (CETR) among Indonesian consumer non-cyclical firms listed on the Indonesia Stock Exchange during 2021–2024. Using firm-year observations and pooled ordinary least squares regression, this study analyzes whether corporate characteristics are associated with firms’ cash tax positions. The findings indicate that institutional ownership is positively associated with CETR, suggesting that stronger institutional monitoring is related to higher cash tax payments and lower tax avoidance tendencies. Meanwhile, leverage, managerial ownership, debt reliance, and profitability do not show significant associations with corporate tax behavior. This study contributes to the corporate governance and taxation literature by highlighting the role of ownership mechanisms in explaining firms’ cash tax positions in an emerging market context