THE EFFECT OF FINANCIAL PERFORMANCE, SOLVABILITY AND REVENUE GROWTH ON TAX AVOIDANCE OF FOOD AND BEVERAGE COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE

Abstract

This study aims to analyze the relationship between financial performance, solvency, and revenue growth with tax avoidance practices in Food and Beverage companies listed on the Indonesia Stock Exchange (IDX). Using a quantitative approach, this study relies on secondary data obtained from company annual reports for the period 2019 to 2023. Company financial performance is measured using Return on Assets (ROA), while solvency is analyzed using the Debt to Equity Ratio (DER). Revenue growth is calculated based on annual changes in sales volume. For the dependent variable, tax avoidance is measured using the Effective Tax Rate (ETR), which reflects how efficiently a company manages its tax obligations.

The results of this study indicate that financial performance has a significant relationship with tax avoidance. Companies that demonstrate high levels of financial performance, as reflected in strong ROA, tend to be more careful and planned in managing their tax obligations to maintain optimal profit margins. Solvency has a significant influence on tax avoidance. Meanwhile, revenue growth shows a significant influence, where companies that experience consistent sales increases are more likely to adopt structured and efficient tax avoidance strategies to maximize the management of the company's fiscal burden