Firm Characteristics (Empirical Study on LQ45-Listed Firms on the Indonesia Stock Exchange, 2022–2024)
DOI:
https://doi.org/10.55927/ijems.v4i5.94Keywords:
GRI 207, Tax Disclosure, Tax Avoidance, Legitimacy Theory, Agency TheoryAbstract
Tax disclosure has emerged as a mechanism through which firms signal accountability for their tax positions, yet whether it constrains or merely accompanies corporate tax avoidance remains unsettled in emerging markets. Drawing on Legitimacy Theory and Agency Theory, this study examines the effect of GRI 207 tax disclosure and four firm characteristics (profitability, leverage, growth opportunity, and firm size) on corporate tax avoidance among LQ45-listed firms on the Indonesia Stock Exchange. Using a Fixed Effects panel regression on 87 firm-year observations (29 firms, 2022–2024), with tax disclosure hand-scored through content analysis against the GRI 207 index and tax avoidance proxied by the Effective Tax Rate, the results show that GRI 207 disclosure has no significant effect on tax avoidance. Instead, profitability significantly increases tax avoidance while leverage is associated with more, rather than less, aggressive tax positions; growth opportunity and firm size show no independent effect. Jointly, however, all variables significantly explain variation in tax avoidance, indicating that internal financial characteristics outweigh voluntary disclosure as drivers of tax behaviour among Indonesia’s blue-chip firms
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