The Effect of Leverage, Profitability, and Sales Growth on Tax Avoidance with Firm Size as a Moderating Variable

Abstract

This study is motivated by the ongoing practice of corporate tax avoidance through the use of gaps in accounting policies. Based on Slippery Slope Theory, this research examines the effect of leverage, profitability, and sales growth on tax avoidance, with firm size as a moderating variable. The study employs a quantitative method using secondary data derived from the financial statements of infrastructure companies listed on the Indonesia Stock Exchange during the 2021–2024 period. The sample consists of 45 companies selected through purposive sampling. Data analysis is conducted using moderation regression  analysis with the assistance of EViews 13 software. The findings indicate that leverage and sales growth have a negative but not significant effect on tax avoidance, while profitability has a negative and significant effect on tax avoidance. Firm size is not able to moderate the relationship between leverage and sales growth and tax avoidance, but it is able to moderate the relationship between profitability and tax avoidance.