IJAMESC, Vol. 1 No.

01, February 2023 e-ISSN 2986-8645

THE INFLUENCE OF LEVERAGE, FINANCIAL DISTRESS

AND
TRANSFER PRICING ON TAX AVOIDANCE

Vena Angela1*, Diana Frederica2

1,2.Krida Wacana Christian University
Corresponding Author:
Email: venaangela05@gmail.com
Accepted by Editors: 29-01-2023 | Completed Revision: 28-02-2023 | Published: 28-02-2023
Abstract
Taxes are an expense for company which is in financial statement will reduce a net
profit, so that the company will pay a tax expense as low as they can to get a maximum
profit. Therefore, this study aims that I take to analyze the influence of Leverage,
Financial Distress and Transfer Pricing on Tax Avoidance in mining companies listed on
the Indonesia Stock Exchange with research period during 2017-2021. The Sampling of
this study using purposive sampling method and obtained 20 companies with 88 sample.
The technique that used in this study is date panel regression analysis with Eviews 12
Software. The result of this study indicate there is no influence between Leverage and
Transfer Pricing on Tax Avoidance. Meanwhile, on the other hand, there is an influence
between Financial Distress on Tax Avoidance.
Keywords: Effective Tax Rate, Leverage, Financial Distress, Transfer Pricing

1. Introduction
Tax is one of the sectors which is the largest source of Indonesian State revenue,
around 80 percent of the total source of income from the tax sector. Funds obtained by
the state are used for development, one of these funds is obtained from tax payments
made by the community (Iswatini et al., 2022). Given that in 2020 there was the spread
of the Covid-19 outbreak which had a negative impact on taxation in Indonesia. Taxes
are the country's largest source of revenue which contributes significantly to the handling
and recovery of a deficit of 6.1% (Angelina et al., 2022). During the Covid-19 pandemic,
taxpayers who experienced unfavorable impacts tried to optimize profits by avoiding
taxes (Angelina et al., 2022). This is utilized by taxpayers by implementing the tax system
in Indonesia, namely the self-assessment system, which means that the government gives
trust to the public to calculate, deposit and report their taxes independently in accordance
with the amount of tax payable regulated in the tax law. The target amount of the tax
value increases every year, but the target that has been planned has never been achieved
(Herfiana, 2022). Target data and realization of tax revenue from 2017 to 2021 can be
seen in table 1.1 as follows:

International Journal of Accounting, Management, Economics and Social Sciences. 28

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Table 1
Target and Realization of Tax Revenues for 2017-2021
Achievement
Year Revenue Target Revenue Realization
Percentage (%)
2017 1.472.709.861.674.970 1.343.529.642.786.440 91,23%
2018 1.618.095.493.162.000 1.518.791.948.865.510 93,86%
2019 1.786.378.650.376.000 1.546.134.751.863.720 86,55%
2020 1.404.507.505.772.000 1.285.145.990.250.180 91,50%
2021 1.444.541.564.794.000 1.547.867.678.893.420 107,15%
Source: www.kemenkeu.go.id, 2021

Over the past 5 years, only 2021 has reached the target or more than the target. In
2021, the corporate tax rate will decrease to 22% with this policy, the government expects
companies to comply in paying their taxes. The results can help increase tax revenue, but
the effects of the pandemic affect all businesses so that companies will make policies that
are more profitable for their companies. So the company carries out various strategies to
minimize the tax burden and tries to determine the accounting method that is considered
appropriate. Corporate taxpayers have room to reduce income by utilizing the Statement
of Financial Accounting Standards (PSAK 72) (Saptono P, 2021). With PSAK 72,
companies can postpone the revenue recognition to the following year because they want
to take advantage in 2022 tax rate of 20%. So companies will tend to do creative
accounting and legal planning so that revenue can be recognized in 2022.
Based on a report from Global Witness, the phenomenon that occurs in companies
located in Indonesia is implementing a transfer pricing for tax avoidance strategy, namely
PT. Adaro Energy Tbk, occurred in 2019. It is suspected that the issuer ADRO carried
out transfer pricing, namely transferring large profits to companies located in countries
that apply low tax rates. ADRO issuers committed tax evasion from 2009 to 2017, from
carrying out these tax evasion actions, ADRO issuers allegedly paid US$125 million
lower in taxes than they should have paid taxes in Indonesia. In Suryani Suyanto &
Associates in 2021 explained that PwC Indonesia as the Big Four KAP revealed that only
30 percent of the 40 large mining companies had submitted tax reports with transparency
in 2020, meanwhile 70 percent had not been transparent with taxes disclosed in PwC's
latest publication entitled Mine 2021 Great Expectations, Seizing Tomorrow.
There are several factors that determine the tax avoidance strategy, the first is
Leverage. Leverage is the ratio used by the company to assess the amount of debt owned
by the company to finance the company's operating activities. Based on Tax Regulations
Article 6 paragraph (1) letter a Law Number 36 of 2008 regarding PPh stipulates that loan
interest is a deductible expense for the company's PKP (deductible expense), so that the
company can use it to minimize the tax owed.

International Journal of Accounting, Management, Economics and Social Sciences. 29

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

The second factor is Financial Distress. Companies that are in a bad financial position
or in difficult conditions have a tendency to implement tax avoidance to minimize the
company's expenses and cash outflow (Rani, 2017). Apart from Leverage and Financial
Distress, there is a third factor, namely Transfer Pricing. Transfer Pricing is the provision
of transfer prices by companies for goods or services (Oktaviana et al., 2019). Transfer
pricing is carried out by two companies that have special relations both domestically and
internationally. The company's transfer pricing aims to improve the company's
performance and minimize the tax burden so that the company's cash flow and profits
increase.

2. Theoretical Background
Agency Theory
Agency theory is a contract between one or several principals who give authority to
other people (agents) to make decisions in running the company (Jensen and Meckling,
1976). Agency theory shows that companies can be seen as a contractual relationship
(loosely defined) with resource holders (Ndiwu, 2019). According to Shleifer and Vishny
(1997) explained that, the management appointed as the manager of the company raises
two problems in agency relations, including: (1) Information asymmetry indicates that
management as the manager of the company has more information regarding the position
of financial statements than the owner, (2 ) Conflict of interest in which management and
stakeholders have different goals, while management does not act according to the wishes
of stakeholders. Differences in interests that occur between management and stakeholders
affect company performance, one of which is the policy of a company in carrying out tax
activities.
Tax Avoidance
Tax evasion is an engineering "tax affairs" which is still within the framework of tax
provisions (lawful) (Herfiana, 2022). From this statement it can be interpreted that as a
form that is carried out to ease the tax burden paid by a company, but does not violate
applicable tax regulations. The profit of a company is influenced by one of them is the
tax burden, the greater the tax burden will reduce profits, and vice versa if the tax burden
is small then the profit will be large. This strategy is carried out by companies because
they want to have maximum profits (Panjalusman et al., 2018). Therefore, the company
carries out tax management in order to be able to deposit taxes efficiently but also comply
with applicable tax regulations.
In this study using the Effective Tax Rate proxy. This proxy was chosen in this study
because it compares the total income tax expense with pre-tax profit with the aim of
knowing the effective tax rate or tax payment rate. If the resulting ratio of the ETR is 0
to 0.25 which can be interpreted the lower it is (close to zero), the higher the level of tax
avoidance. Conversely, if the ETR value is higher than 0.25, then tax evasion does not
increase.

International Journal of Accounting, Management, Economics and Social Sciences. 30

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Leverage
Leverage is the level of debt owned by companies in financing (Herfiana, 2022). By
making a loan, funds or capital are used by the company to increase profits and develop
the business. This is done by the company because it is the main capital to continue to
operate and survive. According to J. Fred Weston and Thomas E. Copeland (2011: 242)
the leverage ratio is divided into several, namely: (1) Debt to Asset Ratio (DAR) and (2)
Debt to Equity Ratio (DER). Leverage affects the level of effectiveness in tax
measurement, so that if the interest expense is greater it will result in lower taxable
income and will result in a lower tax burden as well.
Financial Distress
Financial distress is a condition of a company that is affected by changes in economic
conditions and has an impact on a decrease in the company's financial condition which
allows it to go bankrupt (Selistiaweni et al., 2020). One of the important aspects of
financial statement analysis is to predict the viability of the company (Astriyani et al.,
2022). So companies tend to do tax avoidance to maintain cash. Financial Distress can be
calculated using several formulas, namely the Altman Z-Score, Springate, Zmijewski,
Grover.
Transfer Pricing
According to ministry regulation No 22/PMK.03/2020 regarding procedures for
implementing transfer pricing agreements. In the ministerial regulation, article 1
paragraph (6) regarding the general provisions states that transfer pricing is the price in a
transaction that is affected by a special relationship. Companies use transfer pricing with
the aim of transferring profits to affiliated companies that have special relationships and
are located in countries with low tax rates (Pratomo et al., 2021). With the existence of a
special relationship that exists between one company and another company in a group of
companies, it will cause unfair pricing, so the formula used is to compare the total trade
receivables of related parties with the total trade receivables. This can lead to the transfer
of PKP from one taxpayer to another that is engineered to minimize the tax burden paid
to taxpayers who have a special relationship.

Figure 1
Research Framework
Independent Variabe

Leverage
Dependent Variable
X1
Financial Distress Tax Avoidance
X

Transfer Pricing Y
X3

International Journal of Accounting, Management, Economics and Social Sciences. 31

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Hypothesis Development
The Influence of Leverage on Tax Avoidance
Leverage, namely debt used by the company to meet operational financing to
investment. Through leverage, one can assess how much assets are financed by debt
because it is measured by comparing total debt to total assets. Financing through debt,
especially long-term debt, will generate interest expenses which will reduce the tax
burden that companies must pay (Handoko et al. 2021). The results of research (Fadhila
et al., 2022), (Zahra & Hamdi, 2021), (Pratiwi et al., 2020), (Oktaviana et al., 2019) and
(Ariawan et al., 2017) show that leverage has a positive effect against tax avoidance.
H1 : Leverage has positive effect on Tax Avoidance.

The Influence of Financial Distress on Tax Avoidance

Financial distress is the state of a company that is in financial trouble. In this condition,
the company is unable to pay its financial obligations due to a lack of funds, resulting in
delays in business activities and indications of bankruptcy (Fadhila et al., 2022). This
difficulty occurred as a result of a lack of capital due to the inappropriate use of company
funding sources. If related to agency theory, one of the responsibilities of the agent to the
principal is related to the reporting of the company's financial condition. The financial
condition and continuity of the company determines the principal's prosperity. Research
conducted by (Fadhila et al., 2022), (Iswatini et al., 2022), (Muttaqin et al., 2020),
(Ndiwu, 2019), (Alifianti et al., 2017) states that financial distress has an effect on
positive on tax avoidance.
H2 : Financial Distress has positive effect on Tax Avoidance.

The Influence of Transfer Pricing on Tax Avoidance

Transfer pricing merupakan kebijakan penetapan harga yang dilakukan perusahaan
yang memiliki hubungan istimewa. Hubungan istimewa dapat mengakibatkan
ketidakwajaran harga, biaya, atau imbalan lain yang direalisasikan dalam suatu transaksi
usaha (Monica et al., 2021). Pada posisi pelaku transfer pricing maka perusahaan
diuntungkan, akan tetapi tidak bagi negara karena menyebabkan penerimaan negara
berkurang dari sektor pajak. Penelitian yang dilakukan oleh (Iswatini et al, 2022), (Halim,
2021), (Monica et al., 2021), (Pratomo et al., 2021), (Oktaviana et al., 2019) menyatakan
bahwa transfer pricing berpengaruh positif terhadap tax avoidance.
H3 : Transfer Pricing has positive effect on Tax Avoidance.

3. Methods
The method used in this research is quantitative data sources. According to the type of
data in this study, namely secondary data by taking the financial reports of mining
companies listed on the Indonesia Stock Exchange for 2017-2021. So with this method,
we can see whether there is a significant relationship between the variables studied and
provide conclusions about the research description. In this study, data will be analyzed
using data processing, namely Eviews 12 Software. Sampling in this study used a
purposive sampling technique, namely a non-random sampling technique and the
characteristics or criteria were determined by the researcher (Lenaini, 2021).
This study uses more than one independent variable which explains how it relates to
the dependent variable. This test was carried out with a significance level of 0.10. This
test uses panel regression which is carried out to see the direction and magnitude of the
influence of the independent variables on the dependent variable. Panel data regression

International Journal of Accounting, Management, Economics and Social Sciences. 32

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

was carried out with two types of data, namely time series and cross section. The
following is the panel data regression equation model in this study:
TA = β0 + β1LEV + β2FD + β3TP + ε
Keterangan:
TA = Effective Tax Rate (Tax Avoidance)
β0 = Konstanta
β1- β3 = Koefisien variasi tiap variabel independen
LEV = Debt to Asset Ratio (Leverage)
FP = Altman Z-Score (Financial Distress)
TP = Transfer Pricing
ε = Error term

Variable Operationalization
Tax Avoidance
Tax Avoidance is a tax avoidance activity that is legally legal and makes business
sense, however, the government does not want it because it is considered to make it
difficult for the government to achieve its tax revenue target (Oktaviana et al., 2019).

!"#$% '()"*+ !$, -,.+(/+

-$0(1(2 3+4"0+ !$,

Leverage
Leverage is the ratio of the amount of debt owned by a company that is used by the
company to finance its operating activities (Ariawan et al., 2017).
!"#$% 5+6#
DAR =
!"#$% 7//+#

Financial Distress (Altman Z-Score)

Financial Distress is a manifestation of a financial crisis which can be seen from the
company's financial statements, in which the company is unable to pay its obligations
both short and long term (Siburian et al., 2021).
Altman Z-score :
Z = 6,56 T1 + 3,26 T2 + 6,72 T3 + 1,05 T4
T1: Net Working Capital / Total Asset
T2 : Retained Earning / Total Asset
T3 : EBIT / Total Asset
T4 : Market Cap / Total Liability

International Journal of Accounting, Management, Economics and Social Sciences. 33

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Transfer Pricing
Transfer Pricing is pricing in transactions between related parties, also known as
intracompany pricing, intercorporate pricing, interdivisional or internal pricing which is
calculated for management control between members (Panjalusman et al., 2018).
8+)+19$6%+ 40"* 8+%$#+: ;$0#1+/
!"#$% !0$:+ 8+)+19$6%+

Analysis Techniques
In this study using descriptive statistical tests, classic assumption tests consisting of
normality tests, multicollinearity tests and heteroscedasticity tests as well as hypothesis
testing which can be used to test the relationship between variables. However, before
testing the classical assumptions and testing the hypotheses, it is necessary to determine
the model between the Common Effect Model, Fixed Effect Model or Random Effect
Model.

4. Results dan Discussion

Descriptive Statistics

Table 2
Descriptive Statistics Test Results
Variable N Min Max Mean Median Std. Dev
TA 88 0,00178 0,907778 0,258513 0,235359 0,178913
LEV 88 0,088040 0,992535 0,467898 0,473832 0,173646
FD 88 -0,962041 41,03017 6,942235 3,976326 7,111644
TP 88 0,0000008 2,087965 0,263792 0,146587 0,352253
Source: Data processed with Eviews 12, 2023.

Classic Assumption Test

Figure 2
Model Selection

Chow Test

Lagrange
Multiplier Test

Hausman Test

International Journal of Accounting, Management, Economics and Social Sciences. 34

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Chow Test
Redundant Fixed Effects Tests
Equation: Untitled Table 3
Test cross-section fixed effects Chow Test Results

Effects Test Statistic d.f. Prob.

Cross-section F 9.426929 (19,65) 0.0000

Cross-section Chi-square 116.444984 19 0.0000

Source: Data processed with Eviews 12, 2023.

Table 3 shows the results of the Chi-square Cross-section Probability 0.0000 <0.10,
meaning that Ho is rejected and Ha is accepted. The results of the Chow test show that
the correct model for this panel data regression is the Fixed Effect Model.

Hausman Test
Correlated Random Effects - Hausman Test
Equation: Untitled Table 4
Hausman Test Results
Test cross-section random effects

Test Summary Chi-Sq. Statistic Chi-Sq. d.f. Prob.

Cross-section random 5.575232 3 0.1342

Source: Data processed with Eviews 12, 2023.

Table 4 shows the results of the random cross-section probability on the Hausman test
of 0.1342 > 0.10, which means that Ho is accepted and Ha is rejected. Hausman test
results show that the selected model is the Random Effect Model.
Lagrange Multiplier Tests for Random Effects
Null hypotheses:
Lagrange MultiplierNo effects
Test
Alternative hypotheses: Two-sided (Breusch-Pagan) and one-sided
(all others) alternatives Table 5
Lagrange Multiplier Test Results
Test Hypothesis
Cross-section Time Both

Breusch-Pagan 35.91853 0.898991 36.81752

(0.0000) (0.3431) (0.0000)

Source:
HondaData processed with Eviews 12, 2023.
5.993207 -0.948151 3.567393
(0.0000) (0.8285) (0.0002)
Table 5 shows the results of the Breusch-Pagan probability on the Lagrange Multiplier
Test of 0.0000 <0.10, which means that Ho is rejected and Ha is accepted. The results of
King-Wutest show that the selected
the Lagrange 5.993207
model is the -0.948151 1.617374
Random Effect Model. So in this
study using the Random Effects Model. (0.0000) (0.8285) (0.0529)

Standardized Honda 6.842916 -0.729323 0.526759

(0.0000)Economics
International Journal of Accounting, Management, (0.7671) (0.2992) 35
and Social Sciences.
IJAMESC, PT. ZillZell Media Prima, 2023.
Standardized King-Wu 6.842916 -0.729323 -0.966991
(0.0000) (0.7671) (0.8332)
IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Normality Test

Table 6
Normality Test Results

20
Series: Standa rdized Res idua ls
Sa mpl e 2017 2021
16 Obs erva ti ons 88

Mea n -0.009308
12 Medi a n -0.024069
Ma xi mum 0.651539
8 Mi ni mum -0.265611
Std. Dev. 0.172510
Skewnes s 1.541064
4 Kurtos i s 6.094006

Ja rque-Bera 69.93210
0 Proba bi l i ty 0.000000
-0.2 0.0 0.2 0.4 0.6
Source: Data processed with Eviews 12, 2023.

Normality test results with a Jarque-Bera value of 69.93210 and a probability of

0.000000 < 0.10 so that the data shows that it is not normally distributed.

Multicollinearity Test
Table 7
Multicollinearity Test Results
Variable LEV FD TP
LEV 1.000000 -0.435189 -0.078438
FD -0.435189 1.000000 -0.219334
TP -0.078438 -0.219334 1.000000
Description: This table aims to see whether or not there is an influence between
each independent variable. Based on the output results above, it shows the value of
r = 0.435189 < 0.8, then Ho is accepted. The conclusion from the test results above
is that there is no multicollinearity between the independent variables.
Source: Data processed with Eviews 12, 2023.

International Journal of Accounting, Management, Economics and Social Sciences. 36

IJAMESC, PT. ZillZell Media Prima, 2023.
IJAMESC,
Dependent Vol. 1 No. 01,ETR
Variable: February 2023 e-ISSN 2986-8645
Method: Panel EGLS (Cross-section random effects)
Date: 01/26/23 Time: 01:29
Sample: 2017 2021
Heteroscedasticity
Periods included: 5 Test
Cross-sections included: 20
Total panel (unbalanced) observations: Table
88 8
Heteroscedasticity
Swamy and Arora estimator of component variances Test Results
Dependent Variable: ETR
Method: Panel EGLS (Cross-section random effects)
Variable Coefficient Std. Error t-Statistic Prob.
Date: 01/26/23 Time: 01:29
Sample: 2017 2021
C
Periods included: 5 0.482096 0.104105 4.630887 0.0000
DAR
Cross-sections included:-0.276273
20 0.168060 -1.643896 0.1039
ALTMAN -0.009279
Total panel (unbalanced) observations: 88 0.003755 -2.470976 0.0155
Swamy andTP Arora estimator-0.078059 0.062982
of component variances -1.239374 0.2187
Source: Data processed with Eviews 12, 2023.
Variable Effects Specification
Coefficient Std. Error t-Statistic Prob.
S.D. Rho
Based on table 8, the results of the Heteroscedasticity Test show that there is one
C
independent variable 0.482096
that has a value of 0.01550.104105 4.630887
<0.10. The variable 0.0000
is Financial Fistress
Cross-section DARrandom 0.144595 0.6812
(Altman) which means there is -0.276273 0.168060
heteroscedasticity. However, -1.643896 0.1039
other independent variables
Idiosyncratic random 0.098916 0.3188
in this study,ALTMAN -0.009279
namely Leverage (DAR) 0.003755
and Transfer -2.470976
Pricing (TP) 0.0155value
have a probability
TP -0.078059 0.062982 -1.239374 0.2187there
of > 0.10. This means that the data is good to use in this regression model because
is no heteroscedasticity. Weighted Statistics
Effects Specification
R-squared
Hypothesis Test 0.076450 Mean dependent var S.D. 0.080944
Rho
Adjusted R-squared 0.043466 S.D. dependent var 0.105259
S.E. of regressionrandom
Determination
Cross-section Coefficient0.101877
Test (R2) Sum squared resid 0.144595 0.871829
0.6812
F-statistic
Idiosyncratic random 2.317801 Durbin-Watson stat 0.098916 2.430414
0.3188
Prob(F-statistic) 0.081383Table 4.9
Determination
WeightedCoefficient
StatisticsTest Results
Unweighted Statistics
R-squared 0.076450 Mean dependent var 0.080944
Adjusted R-squared
R-squared 0.043466 Mean
0.067556 S.D.dependent
dependent var
var 0.105259
0.258513
SumS.E. of regression
squared resid 0.101877 Durbin-Watson
2.596720 Sum squared statresid 0.871829
0.815993
F-statistic 2.317801 Durbin-Watson stat 2.430414
Prob(F-statistic) 0.081383
Source: Data processed with Eviews 12, 2023.
Unweighted Statistics
From table 4.9 the R-squared value is 0.076450 or 7.6450%. These results indicate
R-squared 0.067556 Mean dependent var 0.258513
that the contribution of the independent variables namely Leverage, Financial Distress
Sum squared resid 2.596720 Durbin-Watson stat 0.815993
and Transfer Pricing simultaneously to the rise and fall of the dependent variable namely
tax avoidance is 6.5964%, while the remaining 92.355% is influenced by other factors
not examined in this study.

International Journal of Accounting, Management, Economics and Social Sciences. 37

IJAMESC, PT. ZillZell Media Prima, 2023.
 TP -0.078059 0.062982 -1.239374 0.2187

Effects Specification
IJAMESC, Vol. 1 No. 01, February 2023 S.D.e-ISSN 2986-8645
Rho

Cross-section random 0.144595 0.6812

FIdiosyncratic
Test random 0.098916 0.3188
Table 4.10
F Test Results
Weighted Statistics

R-squared 0.076450 Mean dependent var 0.080944

Adjusted R-squared 0.043466 S.D. dependent var 0.105259
S.E. of regression 0.101877 Sum squared resid 0.871829
F-statistic 2.317801 Durbin-Watson stat 2.430414
Prob(F-statistic) 0.081383
Source: Data processed with Eviews 12, 2023.
Dependent Variable: ETR Unweighted Statistics
Method:
Table Panel
4.11 EGLS (Cross-section
The F-statistic random
value is 2.317801 effects)
> F-table 2.147832 and the Prob value (F-
R-squared
Date: is
01/26/23 0.067556 Mean dependent var 0.258513
statistic) 0.081383Time:
<0.1001:29
indicating that it is significant. This means that the model is
Sum squared
Sample: 2017 resid 2.596720 Durbin-Watson stat 0.815993
fit and suitable for 2021
use in research.
Periods included: 5
tCross-sections
Test included: 20
Total panel (unbalanced) observations: Table 88
4.11
Swamy and Arora estimator of component variances
t Test Results

Variable Coefficient Std. Error t-Statistic Prob.

C 0.482096 0.104105 4.630887 0.0000

DAR -0.276273 0.168060 -1.643896 0.1039
ALTMAN -0.009279 0.003755 -2.470976 0.0155
TP -0.078059 0.062982 -1.239374 0.2187
Source: Data processed with Eviews 12, 2023.
Effects Specification
S.D. Rho
Based on the t-test table 4.11, it shows that Leverage has no effect on Tax Avoidance
because it has a t-statistic probability value of 0.1039 > 0.10 with a coefficient value of -
Cross-section random 0.144595 0.6812
0.276273. Then Financial Distress has a negative effect on Tax Avoidance because it has
Idiosyncratic random 0.098916 0.3188
a t-Statistic probability value of 0.0155 < 0.10 with a coefficient value of -0.009279.
However, Transfer Pricing has no effect on Tax Avoidance because it has a t-Statistic
Weighted Statistics
probability value of 0.2187 > 0.10 with a coefficient value of -0.078059.
5. Conclusion
R-squared 0.076450 Mean dependent var 0.080944
This studyR-squared
Adjusted aims to obtain empirical evidence
0.043466 S.D.regarding the effect
dependent var of leverage, financial
0.105259
distress and transfer
S.E. of regression pricing on tax avoidance in mining
0.101877 Sum squared resid companies listed on the IDX for
0.871829
the F-statistic
2017-2021 period. The sample in this study
2.317801 amounted stat
Durbin-Watson to 20 companies from 66
2.430414
populations which
Prob(F-statistic)have been analyzed using
0.081383 panel data regression analysis. Based on the
results of the research conducted, there are several conclusions. Leverage and Transfer
Pricing have no effect on tax avoidance.
Unweighted These results do not support the first and third
Statistics
hypotheses which show that fluctuations in leverage and transfer pricing do not affect tax
avoidance
R-squaredpractices. However, 0.067556
Financial Distress affects tax avoidance.
Mean dependent var These results
0.258513
support
Sum the secondresid
squared hypothesis which showsDurbin-Watson
2.596720 that the rise and fall of financial
stat distress
0.815993
affects tax avoidance practices.

International Journal of Accounting, Management, Economics and Social Sciences. 38

IJAMESC, PT. ZillZell Media Prima, 2023.
 IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

References

Alifianti, R., Putri, H., dan Chariri, A. (2017). Pengaruh Financial Distress dan Good
Corporate Governance terhadap Praktik Tax Avoidance pada Perusahaan Manufaktur.
Diponegoro Journal Of Accounting, 6(2), 1–11.
Angelina, A., Margaretha, M., Budiman, R., Kristanto, S. B., dan Hartoni, H. (2022). Strategi
Penghindaran Pajak Perusahaan Sebelum dan Selama Masa Pandemi. Jurnal Akuntansi
Kontemporer, 14(3), 173–184. https://doi.org/10.33508/jako.v14i3.3842
Aprianto, M., dan Dwimulyani, S. (2019). Pengaruh Sales Growth dan Leverage terhadap Tax
Avoidance dengan Kepemilikan Institurional sebagai Variabel Moderasi. Prosiding
Seminar Nasional Pakar Ke 2 Tahun 2019 (Sosial Dan Humaniora).
Ariawan, I. Ma. A. R., dan Setiawan, P. E. (2017). Pengaruh Dewan Komisaris Independen,
Kepemilikan Institusional, Profitabilitas dan Leverage terhadap Tax Avoidance. E-Jurnal
Akuntansi Universitas Udayana, 18.3.
Artamivia Monica, B., dan Irawati, W. (2021). Pengaruh Transfer Pricing dan Sales Growth
terhadap Tax Avoidance Pada Perusahaan Manufaktur. Prosiding Sarjana Akuntansi
Tugas Akhir Secara Berkala, 1(1).
Astriyani, R. D., dan Safii, M. (2022). Pengaruh Financial Distress, Karakter Eksekutif, dan
Family Ownership terhadap Tax Avoidance (Studi Empiris Pada Perusahaan Property
dan Real Estate Yang Terdaftar di BEI Periode 2016-2020). Jurnal Akuntansi, 3(1).
https://doi.org/10.46306/rev.v3i1.148
Fadhila, N., dan Andayani, S. (2022). Pengaruh Financial Distress, Profitabilitas, dan Leverage
terhadap Tax Avoidance. Riset Dan Jurnal Akuntansi, 6(4), 3489–3500.
https://doi.org/10.33395/owner.v6i4.1211
Halim, M. (2021). Pengaruh Return on Assets (ROA), Debt to Assets Ratio (DAR) dan
Transfer Pricing terhadap Tax Avoidance (Studi Empiris pada Perusahaan Manufaktur
Sektor Food and Beverage yang Terdaftar di Bursa Efek Indonesia Periode 2017- 2019).
Posiding Ekonomi Dan Bisnis, 1(1).
Handayani, M. F. (2019). Pengaruh Profitabilitas, Leverage, dan Ukuran Perusahaan terhadap
Penghindaran Pajak. Jurnal Ilmu Dan Riset Akuntansi.
Handoko, R., dan Triyani, Y. (2021). Pengaruh Ukuran Perusahaan, Leverage, Sales Growth
dan Umur Perusahaan terhadap Tax Avoidance pada Perusahaan Manufaktur yang
Terdaftar di Bursa Efek Indonesia Periode2016-2018. Institut Bisnis Dan Informatika
Kwik Kian Gie.
Herfiana, N. N. (2022). Pengaruh Harga Transfer, Leverage dan Ukuran Perusahaan
terhadap Penghindaran Pajak pada Perusahaan yang Terdaftar di BEI Tahun 2018-
2020.
Iswatini, N., dan Asalam, A. G. (2022). Transfer Pricing, Kompensasi Rugi Fiskal, Financial
Distress dan Agresivitas Pajak. Jurnal Akuntansi, 32(8), 2015–2028.
https://doi.org/10.24843/EJA.2022.v32.i08.p05
Juliana, D., dan Stiawan, H. (2022). Pengaruh Corporate Social Responsibility, Transfer
Pricing dan Koneksi Politik Terhadap Tax Avoidance. Jurnal Ilmu Sosial Dan
Humaniora, 1(3), 283–291. https://doi.org/10.55123/sosmaniora.v1i3.804
Kusuma Wardani, D., Indah Dewanti, W., dan Indah Permatasari, N. (2019). Pengaruh
Manajemen Laba, Umur Perusahaan dan Leverage Terhadap Tax Avoidance. AKUISIS |
Jurnal Akuntansi Online, 15(2), 18–25. https://doi.org/10.24217

International Journal of Accounting, Management, Economics and Social Sciences. 39

IJAMESC, PT. ZillZell Media Prima, 2023.
 IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Lenaini, I. (2021). Teknik Pengambilan Sampel Purposive dan Snowball Sampling. Jurnal
Kajian, Penelitian dan Pengembangan Pendidikan Sejarah, 6(1), 33–39.
https://doi.org/10.31764/historis.vXiY.4075
Mardiatmoko, G. (2020). Pentingnya Uji Asumsi Klasik pada Analisis Regresi Linier
Berganda (Studi Kasus Penyusunan Persamaan Allometrik Kenari Muda). Jurnal Ilmu
Matematika dan Terapan, 14(3), 333–342.
https://doi.org/10.30598/barekengvol14iss3pp333-342
Muttaqin, M. Z., Husen, S., Ak, M., dan Si, M. (2020). Pengaruh Financial Distress,
Karakteristik Eksekutif, dan Kompensasi Eksekutif terhadap Tax Avoidance pada
Perusahaan Sektor Barang Konsumsi periode 2016-2018. Pengaruh Financial Distress.
www.idx.co.id.
Ndiwu, K. O. (2019). Analisis pengaruh Good Corporate Governance dan Financial Distress
terhadap Tax Avoidance. Artikel Ilmiah.
Oktaviana, L., Sunarta, K., dan Fadillah, H. (2019). Pengaruh Harga Transfer dan Leverage
terhadap Tax Avoidance Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2014-
2018. Journal of Economic, 6(2).
Panjalusman, P. A., Nugraha, E., dan Setiawan, A. (2018). Pengaruh Transfer Pricing terhadap
Penghindaran Pajak. Jurnal Pendidikan Akuntansi Dan Keuangan, 6(2), 105.
https://doi.org/10.17509/jpak.v6i2.15916
Pratiwi, N. P. D., Mahapura, I. K. A., dan Sudiartana, I. M. (2020). Pengaruh Financial
Distress, Leverage dan Sales Growth terhadap Tax Avoidance pada Perusahaan
Manufaktur yang Terdaftar di BEI Tahun 2016. Jurnal Kharisma, 2(1), 202–211.
Pratomo, D., dan Triswidyaria, H. (2021). Pengaruh Transfer Pricing dan Karakter Eksekutif
terhadapTax Avoidance. Jurnal Akuntansi Aktual, 8(1), 39–50.
https://doi.org/10.17977/um004v8i12021p39
Putri, V. R., dan Putra, B. I. (2017). Pengaruh Leverage, Profitability, Ukuran Perusahaan dan
Proporsi Kepemilikan Institusional terhadap Tax Avoidance. Jurnal Ekonomi
Manajemen Sumber Daya, 19(1). www.kemenkeu.go.id
Putriningsih, D., Suyono, E., dan Herwiyanti, E. (2018). Profitabilitas, Leverage, Komposisi
Dewan Komisaris, Komite Audit, dan Kompensasi Kerugian Fiskal terhadap
Penghindaran Pajak pada Perusahaan Perusahaan Perbankan. Jurnal Bisnis Dan
Akuntansi, 20, 77–92.
Rahmat. (2020). Analisis Financial Distress Menggunakan Model Altman Z-Score, Springate
Zmijewski, Grover dan Penilaian Kesehatan Bank Metode Camel. Jurnal ASET
(Akuntansi Riset), 12(1), 1–16. https://doi.org/10.17509/jaset.v12i1.23062
Rani, P. (2017). Pengaruh Ukuran Perusahaan, Financial Distress, Komite Audit dan
Komisaris Independen terhadap Tax Avoidance (Studi Empiris Perusahaan Manufaktur
yang Terdaftar di Bursa Efek Indonesia Tahun 2012-2016). Jurnal Akuntansi Dan
Keuangan, 6(2).
Siburian, T. M., dan Siagian, H. L. (2021). Pengaruh Financial Distress, Ukuran Perusahaan,
dan Kepemilikan Institusional terhadap Tax Avoidance pada Perusahaan Manufaktur
Subsektor Food and Beverage yang Terdaftar di BEI Tahun 2016-2020. Jurnal Ilmiah
MEA (Manajemen Ekonomi Dan Akuntansi), 5(2).
Swandewi, N. P., dan Noviari, N. (2020). Pengaruh Financial Distress dan Konservatisme
Akuntansi pada Tax Avoidance. E-Jurnal Akuntansi, 30(7), 1670.
https://doi.org/10.24843/EJA.2020.v30.i07.p05
Yuniarwati, dan Alya. (2021). Pengaruh Kepemilikan Institusional, Leverage dan Ukuran
Perusahaan terhadap Tax Avoidance. Jurnal Multiparadigma Akuntansi, 1, 10–19.

International Journal of Accounting, Management, Economics and Social Sciences. 40

IJAMESC, PT. ZillZell Media Prima, 2023.
 IJAMESC, Vol. 1 No. 01, February 2023 e-ISSN 2986-8645

Zahra, S. Z., dan Hamdi, M. (2021). Pengaruh Leverage dan Transfer Pricing terhadap Tax
Avoidance (Studi pada Perusahaan Manufaktur di BEI tahun 2015-2019).

International Journal of Accounting, Management, Economics and Social Sciences. 41

IJAMESC, PT. ZillZell Media Prima, 2023.