Published February 3, 2026 | Version v1
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Profitability, Leverage, Sales Growth, and Tax Avoidance

  • 1. Faculty of Economics and Business, Mercu Buana University, Indonesia

Description

This research analyzes the influence of profitability, leverage, and sales growth on tax avoidance practices in the Indonesian energy sector. Tax avoidance represents a critical phenomenon affecting government revenue, despite remaining within legal boundaries by exploiting regulatory loopholes. This study examines 53 energy companies listed on the Indonesia Stock Exchange (BEI) during 2022-2024. The data analysis method used is multiple regression with independent variables of profitability, leverage, and sales growth, and the dependent variable of tax avoidance measured using Cash Effective Tax Rate (CETR). The research results show that profitability has a significant positive effect on tax avoidance, indicating that highly profitable companies tend to engage in more aggressive tax planning strategies. Leverage demonstrates a positive influence on tax avoidance through the tax shield effect of interest expenses. Sales growth also positively affects tax avoidance as expanding companies seek to optimize their tax burden. These findings imply that companies need to balance tax efficiency strategies with compliance obligations, while regulators should strengthen oversight mechanisms to ensure fair tax practices in the strategic energy sector.

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