Drivers of Tax Avoidance: Evidence from Indonesian Mining Companies

Burhanudin; Kodriyah; Tri Wahyuni Sukiyaningsih; Nabila Nurfayza

doi:10.59890/ijaeam.v4i4.195

Authors

Burhanudin Universitas Serang Raya
Kodriyah Universitas Serang Raya
Tri Wahyuni Sukiyaningsih Universitas Serang Raya
Nabila Nurfayza Universitas Serang Raya

DOI:

https://doi.org/10.59890/ijaeam.v4i4.195

Keywords:

Financial Distress, Firm Size, Transfer Pricing, Tax Avoidance

Abstract

This study aims to examine the effects of financial distress, firm size, and transfer pricing on tax avoidance among Mining sector companies on the Indonesia Stock Exchange. Tax avoidance remains a major concern for governments because it reduces potential tax revenues while remaining within legal boundaries. This study employs a quantitative approach using secondary data obtained from the annual reports and financial statements of Indonesian mining sector companies during the 2023–2025 period. The sample was selected using purposive sampling, and the data were analyzed using panel data regression analysis. The findings indicate that financial distress, firm size, and transfer pricing have positive and significant effects on tax avoidance. These results suggest that financially distressed firms tend to engage in tax planning strategies to preserve liquidity, larger firms possess greater capabilities to implement sophisticated tax planning practices, and companies with extensive related-party transactions are more likely to utilize transfer pricing as a mechanism for minimizing tax liabilities. Among the variables examined, transfer pricing emerged as the most influential determinant of tax avoidance. This study contributes to the literature by providing empirical evidence on the determinants of tax avoidance in the context of emerging economies, particularly Indonesia

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