Scaling Up Tax Strategies: Investigating the Moderating Effect of Leverage on Firm Size, Asset Intensity, and Tax Management

Edi Triwibowo; Dian Sulistyorini  Wulandari; Ratna Kartika  Sari

doi:10.55927/ajma.v3i4.12089

Authors

Edi Triwibowo Universitas Pelita Bangsa
Dian Sulistyorini Wulandari Universitas Pelita Bangsa
Ratna Kartika Sari Universitas Pelita Bangsa

DOI:

https://doi.org/10.55927/ajma.v3i4.12089

Keywords:

Fixed Asset Intensity, Leverage, Tax Management, Company Size, Effective Tax Rate

Abstract

This study examines the relationships between firm size, asset intensity, leverage, and tax management in Indonesian manufacturing companies. Utilizing a panel data approach from 2020 to 2022, the research finds that firm size and asset intensity significantly influence tax management practices, highlighting larger firms' advantages in implementing effective tax strategies. Conversely, leverage does not significantly mediate the relationship between firm size or asset intensity and tax management. These findings suggest that while asset intensity provides firms with opportunities to optimize tax deductions, the impact of leverage on tax management strategies is limited. The research underscores the importance of understanding these dynamics for business leaders aiming to enhance tax efficiency and compliance. Additionally, the study provides practical recommendations for firms and policymakers to improve tax management practices in the manufacturing sector. Overall, the research contributes valuable insights into the factors affecting corporate tax strategies in Indonesia.

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