Determinants of Tax Avoidance: Profitability, Sales Growth, Fiscal Loss Compensation, Firm Size, and Managerial Ownership in Indonesian Mining Companies

Abstract

This study aims to examine the effect of profitability, sales growth, fiscal loss compensation, firm size, and managerial ownership on tax avoidance in mining companies listed on the Indonesia Stock Exchange during the 2022–2024 period. Tax avoidance is an important issue in corporate taxation because it reflects managerial efforts to reduce tax burdens through legally permissible tax planning strategies. The mining sector was selected as the research object because it is a strategic industry with high economic value, complex business activities, and significant tax contribution potential. This study uses a quantitative approach with secondary data obtained from annual financial statements published by mining companies. The sample was selected using a purposive sampling method based on predetermined criteria. A total of 59 companies were selected, resulting in 177 firm- year observations. The data were analyzed using multiple linear regression with the assistance of SPSS software. The results show that profitability has a negative and significant effect on tax avoidance, indicating that more profitable firms tend to engage in lower levels of tax avoidance. Sales growth does not have a significant effect on tax avoidance, suggesting that an increase in sales does not necessarily influence corporate tax avoidance behavior. Meanwhile, fiscal loss compensation, firm size, and managerial ownership have positive and significant effects on tax avoidance. These findings indicate that companies with fiscal loss compensation, larger firm size, and higher managerial ownership tend to have greater incentives or opportunities to conduct tax avoidance. This study contributes to the literature by providing empirical evidence on the determinants of tax avoidance in Indonesian mining companies. The findings also provide practical implications for tax authorities, investors, and corporate stakeholders in assessing corporate tax planning behavior and strengthening tax compliance monitoring.