Article Per Year (5 Year)
p-Index From 2021 - 2026
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All Journal Business, Management & Accounting Journal
Rachmad Dwi Riyanto
Universitas Mercu Buana
Economics, Econometrics & Finance Social Sciences

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The Effect of Firm Size, Profitability, and Leverage on Effective Tax Rate: Evidence from Consumer Goods Manufacturing Firms Listed on the Indonesia Stock Exchange (2021–2024) Rachmad Dwi Riyanto; Yananto Mihadi Putra
Business, Management & Accounting Journal (BISMA) Vol. 3 No. 1 (2026): BISMA Journal March 2026
Publisher : Baca Dulu Publisher

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.70550/bisma.v3i1.127

Abstract

The effective tax rate (ETR) is a key indicator used to evaluate the actual tax burden borne by companies relative to their pre-tax profits. In many cases, ETR is found to be lower than the statutory tax rate, indicating the presence of lawful tax planning strategies or even tax avoidance practices within the boundaries of regulation. This study aims to examine the effect of firm size, profitability, and leverage on ETR in manufacturing companies within the consumer goods sub-sector listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period. A purposive sampling method was used to select 21 companies that met the criteria of consistent audited financial reporting, positive pre-tax income, and complete data availability. The research applied a quantitative approach with multiple linear regression analysis using EViews software. The results indicate that firm size, profitability, and leverage each have a significant negative effect on ETR. These findings suggest that corporate fiscal efficiency is largely determined by internal factors, and legal tax planning is an integral part of financial policy aimed at minimizing tax burdens while complying with prevailing regulations. The study contributes to the understanding of how firm characteristics influence tax strategies, providing insights for policymakers and practitioners in designing effective corporate tax policies.
Co-Authors Yananto Mihadi Putra