Effect Of Tax Avoidance, Size Of The Company, Leverage, Age Of The Company On Cost Of Debt In Manufacturing Companies Listed

Abstract

Tax management is the right, appropriate, and effecient application of tax rules in order to achieve income and liquidity accordingly. The tax is twofold: tax avoidance and tax evasion. This research is a purpose to know the effect of tax avoidance towards the cost of debt in manufacturing companies and find about the tax avoidance which includes illegal, but can lead to the injustice that would harm the state. The samples used in this research are 30 manufacture companies listed in Indonesia stock exchange (BEI). Type of data is secondary data from each for manufacture companies listed in Indonesia stock exchange (BEI) five years from 2011 until 2015. The samples were taken by purposive sampling technics. Analysis of data used with panel data regression with Fixed Effect Model (FEM) estimation and Eviews 9 SV programming. A hypothesis test used are coefficient determination test (R Square), F test, and t-test. The result of the research shows that Tax Avoidance (TAX) has positive and significant effect on the cost of debt on manufacture companies. For independent variable others, manufacture companies size and firms age have negative and significant. However, Leverage has positive and significant effect on cost of debt in companies. Therefore should add another variable closely related to tax avoidance and cost of debt.

Determinants of Indonesian Public Listed Companies to Participate in the Tax Amnesty

“…Pratama (2017a) stated that the older the company, they tend not to conduct tax avoidance. As the company older, the experience of managing the company and creating a well conservative policy were also increased (Ilaboya & Ohiokha, 2016;Syahwier & Fitriani, 2018), so this company is less probable to commit in a questionable act, while the younger companies were usually managed by less experienced management, so the financial performance would still not be optimal (Kholbadalov, 2012). These arguments showed that younger companies will have a higher probability to do more tax avoidance, so they have a higher probability to participate in tax amnesty.…”

A cohesive model of predicting tax evasion from the perspective of fraudulent financial reporting amongst small and medium sized enterprises

“…This study found that there is a negative and statistically significant relationship between company age and tax non-compliance and concluded that the longer a business has been in operation, the less prevalence of tax non-compliance found, implying that older companies have been long established in terms of their operations and therefore would be complying to most of the regulations including tax laws. Earlier than this, studies conducted by Evans (1987) in the USA, Yasuda (2005) in Japan, Na et al (2017) in Korea and studies in Indonesia by Syahwier and Fitriani (2017) and Pratama (2017), all investigating the relationship between company age and tax avoidance practices, came to the same conclusion.…”

The Mediating Impact of the Small and Medium Enterprises Development Agency of Nigeria on the Relationship Between the Critical Success Factors and SMEs' Success

“…The nonfinancial performance disclosure is influenced by the firm's age and size (Wahyuningrum & Djajadikerta, 2020). The firm size and age do not significantly impact earnings management (Indracahya & Faisol, 2017); do not impact the intellectual disclosure of capital (Widiatmoko & Indarti, 2017); and do not affect debt cost (Kinarty, 2020;Syahwier & Fitriani, 2018).…”