The Effect of Liquidity and Financial Distress on Tax Aggressiveness with Firm Size as The Moderating Variable

Abstract

Tax aggressiveness is an act of tax planning to minimize the tax expense both legally (tax avoidance) and illegal (tax evasion). This study aims to analyze the effect of liquidity and financial distress on tax aggressiveness with firm size as the moderating variable. The analysis was performed with a Multiple Linear Regression (MLR) and Moderated Regression Analysis (MRA). The population in this study are State Owned Enterprises (BUMN) Companies Listed on The Indonesia Stock Exchange (IDX) in 2018-2020. The sampling technique of this study was using purposive sampling technique. The results show that liquidity had a negative and significant effect on tax aggressiveness. Financial distress had a positive and significant effect on tax aggressiveness. Firm size had no effect on tax aggressiveness. Firm size is able to moderate effect liquidity on tax aggressiveness and firm size is unable to moderate effect financial distress on tax aggressiveness.