Business Strategy.
Capital Intensity.
Tax Avoidance: Good Corporate Governance as a Moderator Meidita Andrilia1* and Hari Setiyawati2 Department of Accounting.
Faculty of Economics and Business.
Universitas Mercu Buana.
Jakarta.
Indonesia Email Address:
andriliameidita@gmail.
com*, hari_setiyawati@mercubuana.
*Corresponding Author Submitted 26-12-2024 Reviewed 13-01-2025 Revised 16-01-2025 Accepted 16-01-2025 Published 29-09-2025 Abstract: This research begins with phenomenon regarding the difference in interests between the government and taxpayers that can cause tax avoidance actions.
This study aims to determine the influence of business strategy and capital intensity on tax avoidance with good corporate governance as a moderating This research was conducted on companies listed on the Indonesia Stock Exchange from 2018 to 2022, using causality data.
The sample was determined using purposive sampling, consisting of 36 The data analysis techniques used are moderated and multiple regression analysis using e-views The novelty research through the role of good corporate governance as moderation.
The research results show that business strategy has no effect on tax avoidance while capital intensity has a significant effect.
Good corporate governance cannot moderate this influence.
The implementation of business strategies and good corporate governance has no influence in reducing tax avoidance, so itAos necessary to consider other external factors.
Keywords: Strategy Business.
Capital Intensity.
Good Corporate Governance.
Tax Avoidance.
Abstrak: Penelitian ini diawali dengan adanya fenomena mengenai perbedaan kepentingan antara pemerintah dengan wajib pajak yang dapat menimbulkan tindakan penghindaran pajak.
Penelitian ini bertujuan untuk mengetahui pengaruh strategi bisnis dan capital intensity terhadap penghindaran pajak dengan good corporate governance sebagai variabel moderasi.
Penelitian ini dilakukan pada perusahaan yang terdaftar di Bursa Efek Indonesia pada tahun 2018 sampai 2022, menggunakan jenis data kausalitas.
Sampel ditentukan menggunakan teknik purposive sampling, terdiri dari 36 perusahaan sampel.
Teknik analisis data yang digunakan adalah analisis regresi moderasi dan linear berganda menggunakan e-views 13.
Penelitian ini menghadirkan kebaruan melalui peran good corporate governance sebagai moderasi.
Hasil penelitian ini menunjukan bahwa strategi bisnis tidak berpengaruh terhadap penghindaran pajak sementara capital intensity berpengaruh signifikan.
Good corporate governance tidak dapat memoderasi pengaruh tersebut.
Penerapan strategi bisnis dan good corporate governance tidak memiliki pengaruh dalam mengurangi penghindaran pajak, sehingga perlu mempertimbangkan faktor eksternal lain.
Kata Kunci: Strategi Bisnis.
Capital Intensity.
Good Corporate Governance.
Penghindaran Pajak.
INTRODUCTION
One of the Indonesian government's efforts in developing a country is through infrastructure development which requires a large amount of money so that the government needs to get a large amount of revenue to support government needs.
As of April 30, 2024, state revenue has reached Rp924.
900 trillion .
000 per cen.
of the state budget target.
This figure decreased compared to last year .
600 per cen.
This 31.
380 per cent achievement is delayed compared to the 2024 State Budget target (Rp624.
190 trillio.
(Haspramudilla, 2.
As of May 2024, this revenue fell to Rp1,123.
500 trillion .
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per cen.
on an annual basis .
Sri Mulyani revealed that there was a decrease in this revenue to reach Rp1,209.
000 trillion compared to last year (Tim, 2.
Tax revenue is important in developing the country and creating public welfare .
irectly or indirectl.
which ultimately requires government efforts to increase revenue from taxes.
In the self-assessment system adopted by Indonesia on income tax, taxpayers (WP) have the right to calculate, make payments, and report the tax due.
In fact, tax collection, especially on corporate taxpayers, is not in accordance with government expectations.
The government as a tax collector demands as much tax revenue as possible, while companies try to make as little payment as possible, one way is by tax avoidance.
This is a complex and controversial issue because it has two conflicting sides.
On the one hand, taxpayers have the right to minimize their tax obligations with legal steps.
However, this tax avoidance action can harm the state because it minimizes state revenue from taxes.
This action does not violate the law so it is considered legal, so in the context there is no violation of the law.
One of the impacts of tax avoidance practices is reduced state revenue.
According to the Minister of Finance, global tax revenues could lose Rp3,360.
000 trillion each year due to BEPS activities (Uli, 2.
According to Putu Oka (Acting Head of the BKF State Revenue Policy Cente.
revealed that there is an increase in the number of corporate taxpayers who claim to have lost money for years but continue to operate, indicating the occurrence of tax avoidance practices (Ardianto, 2.
Some cases related to tax avoidance activities by a company include a coal company.
PT Adaro Energy Tbk, which allegedly carried out this action through a subsidiary located in Singapore using a transfer pricing scheme.
Director of Counseling.
Service and Public Relations of DGT Hestu Yoga Saksama revealed that this allegation arose because of the Global Witness report which became input in order to ensure that Corporate Taxpayers comply with the rules (Friana, 2.
In addition, in Indonesia, there is tax avoidance implemented by tobacco companies through PT Bentoel Internasional Investama.
BAT
(British American Tobacc.
is the owner of this tobacco company.
Through the NGO Tax Justice Network Report, the Tax Justice Network brought attention to this issue.
The country may lose $14 million annually as a result of this case (Prima, 2.
The Pandora Papers investigative journalism report reveals information about the political and financial schemes of global elites.
The Pandora Papers disclose financial transaction documents spanning the last five decades, with the majority of transactions occurring between 1996 and 2020.
This investigation provides a broad overview of global tax avoidance practices and the establishment of shell companies in tax haven countries to circumvent high tax rates in the jurisdiction of origin.
The creation of shell companies is a legal activity.
However, the confidentiality granted carries the risk of concealing practices such as bribery, money laundering, terrorism financing, and tax avoidance (Candra, 2.
Tax avoidance is defined by (Mardiasmo, 2.
as an effort to reduce the tax burden without breaking the law.
In order to evade their tax duties, taxpayers take advantage of the gaps in Indonesia's tax rules and regulations, which lowers the amount of tax that must be paid.
According to the legislation, tax avoidance is acceptable.
Although tax avoidance is legal, it is detrimental to the state because it decreases state revenue.
Referring to cases that occurred in a number of countries, tax avoidance schemes are classified into acceptable tax avoidance and unacceptable tax avoidance.
Acceptable tax avoidance is characterized by having a good purpose, not to avoid taxes, and not to make fake Meanwhile, unacceptable tax avoidance is characterized by not having a good Jurnal Akuntansi/Volume 29.
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purpose, avoiding taxes, and creating fake transactions.
Different nations may have different ideas on what kinds of tax avoidance are permissible and improper.
Thus, a particular tax avoidance scheme may be permissible in one country, but not in another.
this case, one country's view with other countries for what schemes can be categorized as permissible tax avoidance and impermissible avoidance is not always the same.
One definition of tax avoidance is a tax planning strategy intended to obviously lower taxes.
According to (Mardiasmo, 2.
, tax avoidance is an effort to reduce the tax burden in a way that complies with the law.
Tax evasion and tax avoidance are the two types of tax avoidance strategies used in Indonesia.
In order to avoid paying taxes, taxpayers take advantage of the gaps in Indonesia's tax rules and regulations, which eventually reduces the amount of tax owed.
According to the legislation, tax evasion is Although it is legal, tax avoidance hurts the state since it reduces the amount of money the state receives from taxes.
Due to the volume of tax-avoiding instances, earlier researchers have examined the elements that contribute to tax avoidance.
Business strategy is one element that may influence the avoidance of taxes.
Business strategy, according to (Wheelen et al.
, 2.
focuses on enhancing the competitive position of the company's goods or services within a certain market or industry.
Therefore, enhancing the competitive position of the company's goods or services in a specific market or industry is a key component of business strategy.
Research by (Wahyuni et al.
, 2.
, (Sadjiarto, 2.
, and (Putri & Setiawan, 2.
has proven that business strategy affects tax avoidance.
However, the findings of studies conducted by (Damayanti & Wulandari, 2.
, (Heriana et al.
, 2.
and (Pertiwi & Masripah, 2.
argue that avoidance of taxes is unaffected by business Reducing expenses that might be subtracted from profits in line with Law Number 36 of 2008 Article 6 concerning Income Tax is one strategy to lessen the company's tax One of these is capital intensity, in which the business uses the quantity of fixed assets it owns to subtract the cost of depreciation from its earnings, resulting in a lower profit margin and lower tax obligations.
Research conducted by (Mailia & Apollo, 2.
, (Kalbuana et al.
, 2.
, (Pattiasina et al.
, 2.
, and (Hidayah & Ernandi, 2.
demonstrate how tax avoidance is impacted by capital intensity.
However, research conducted by (Maulana et al.
, 2.
, (Afrianti et al.
, 2.
, (Ristanti, 2.
, and (Putri & Setiawan, 2.
, demonstrates that tax avoidance is unaffected by capital intensity.
The way businesses handle risk, compliance, and transparency is influenced by good corporate governance, and this can affect tax avoidance tactics.
Monitoring and holding company management accountable are the main focuses of good corporate governance.
The goal of putting good corporate governance into practice is to make sure that businesses operate without breaking any laws or rules.
Corporate governance often focuses more on transparency, accountability, and risk management in general.
Research conducted by (Anugerah et al.
, 2.
demonstrates how the impact of business strategy, as measured by capital intensity, on tax avoidance can be moderated by good corporate governance, as measured by management and institutional ownership.
Meanwhile, different results were shown by (Afrianti et al.
, 2.
and (Rosalin & Chrismastuti, 2.
which revealed that good corporate governance cannot moderate the effect of business strategy through company growth and sales growth on tax avoidance.
Research by (Anugerah et al.
, 2.
and (Hidayah & Ernandi, 2.
proves that good corporate governance proxied by managerial ownership and institutional ownership can moderate the effect of capital Jurnal Akuntansi/Volume 29.
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intensity on tax avoidance.
Meanwhile research conducted by (Sinaga & Suardhika, 2.
, (Afrianti et al.
, 2.
, (Ristanti,2.
, and (Ghozali, 2.
demonstrates different outcomes in which the impact of capital intensity on tax avoidance cannot be moderated by good corporate governance as measured by independent commissioners.
Taxpayers have the right to legally reduce their tax liability, making tax avoidance a complicated issue.
However, tax avoidance can be problematic because it lowers state revenue from taxes.
Given this background and the inconsistent results of previous studies, the objective of this study was to gather empirical data on how business strategy and capital intensity affect tax avoidance.
This study also aimed to determine whether good corporate governance can serve as a moderating variable in the relationship between capital intensity and business strategy on tax avoidance.
This study employs business strategy variables because a corporation may engage in tax avoidance to sustain high profits if it employs a good business plan and makes a sizable profit.
The capital intensity variable is used to show that investing in fixed assets will boost production capacity, which will raise profits.
With the existence of fixed assets, it will bring up costs which include depreciation costs, maintenance costs, insurance costs which can be a deduction of income in the calculation of corporate tax.
Therefore, the present study use corporate governance as a non-technical metric for evaluating the impact on practices of tax avoidance.
Manufacturing firms in the consumer non-cyclicals industrial category were the focus of the study.
This sector procures basic goods needed by the community so that it becomes one of the industrial sectors needed by the wider community and this sector will continue to experience growth.
In addition.
British American Tobacco (BAT), one of the businesses that falls within the manufacturing category of the consumer non-cyclicals industry sector, has engaged in a case of tax avoidance.
This study offers novelty by combining three important variables on tax avoidance, namely business strategy, capital intensity, and good corporate governance.
Research with a combination of the independent variable of business strategy with the moderating variable of good corporate governance is still very little.
This study presents the latest analysis covering the period 2018 to 2022, thus providing the latest perspective on the impact of business strategy and capital intensity on tax avoidance which may show a shift or confirmation of the findings in previous studies.
In previous studies, the interpretation of capital intensity variables only discussed depreciation expense as a tax deduction.
This study presents other aspects beyond depreciation expense so that the interpretation in this study becomes more in-depth.
Understanding and addressing tax avoidance tactics that are now relevant and have an impact on decreased state revenue is what makes this research essential.
This research is important because it has not been fully explained or addressed in the existing legal This research presents an in-depth analysis of how tax laws can be adapted to respond to contemporary challenges.
In the context of capital intensity, good corporate governance, tax avoidance, and business strategy, the findings of this study can help to clarify the theory, particularly agency theory and integrative negotiation theory.
Practically, the current study is a contribution to the government in identifying and understanding the various factors that influence tax avoidance, as well as in formulating more effective policies and strategies to address the problem of tax avoidance.
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THEORETICAL REVIEW
Agency Theory.
Agency theory is the theoretical basis underlying corporate business practices so far.
(Brealey et al.
, 2.
stated that a modern corporation is a team effort involving a number of players, such as managers, employees, shareholders, and bondholders.
For a long time, economists used to assume with-out question that all these players acted for the common good, but in the last 30 years, they have had a lot more to say about the possible conflicts of interest and how companies attempt to overcome such conflicts.
The aforementioned concepts are collectively referred to as agency theory.
According to (Henry, 2.
, the agency problem results from the separation of an organization's ownership and itAos control.
It is a fundamental aspect of the connection between the people who contribute capital, known as the principal, and the people who use that capital, known as the agent.
Therefore, (Solomon, 2.
explained that the shareholder, who is the owner or Aoprincipal' of the company, delegates day-to-day decision making in the company to the directors, who are the shareholderAos AoagentsAo.
The issue with this corporate ownership structure is that agents may not always act in the principal's best interests when making choices.
The tension between the principal's and agent's goals is one of the main tenets of agency theory.
A fundamental tenet of finance theory is that corporations' main goal is to maximize shareholder wealth.
Integrative Negotiation Theory.
The integrative negotiation theory is defined by (Thompson, 2.
as an approach to negotiation that focuses on creating mutually beneficial .
in-wi.
solutions for all parties involved.
This theory emphasizes collaboration between the negotiating parties, with the goal of identifying shared interests and finding alternatives that can optimally satisfy the needs of both sides.
Tax Avoidance.
(Gokten & Kucukkocaoglu, 2.
explained that Autax avoidance is a legitimate means of minimizing taxes.
Ay.
Tax avoidance, according to (Mardiasmo, 2.
, is an attempt to lower the tax burden in ways that do not contravene the law.
(Pohan, 2.
explains that tax avoidance is defined as the deliberate strategy of evading taxes that is both safe and legal for taxpayers, as it does not constitute a violation of any established tax The strategies and tactics employed by these entities typically exploit the ambiguities .
ray area.
in the tax laws and regulations to reduce the amount of tax owed.
Tax avoidance enables management to minimize the tax burden and maximize profits for shareholders (De Vito & Grossetti 2.
(Suleman, 2.
stated that tax avoidance is a form of tax strategy aimed at legally reducing taxes.
Business Strategy.
Strategy is a set of ideas, decisions, and actions that contribute to a company's success, according to (Dess et al.
, 2.
Business strategy, as described by (Wheelen et al.
, 2.
business strategy as focusing on improving the competitive position of a company's products or services within a specific industry or market segment.
In addition, (Henry, 2.
stated that business strategy, also known as competitive strategy, relates to how an organization will compete in a certain market or industry.
According to the history of management, strategy was created by the Greeks with the aim of achieving victory in a war.
The essence of strategy is to effectively utilize available resources to achieve victory in a battle.
The use of strategy in the world of trade aims to increase competitive advantage and maintain the existence of competitive advantage.
(Yam, 2.
explains that strategy is an action plan that will be taken to achieve excellence Jurnal Akuntansi/Volume 29.
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in a competition in the market or in an activity.
The strategy describes a careful and effective action plan that will be taken in an activity.
Capital Intensity.
Based on (Ross et al.
, 2.
, capital intensity is a measure of a company's asset-based capital, which is represented in a ratio that compares operational assets to revenues during a specific time period.
To put it another way, capital intensity is a ratio that compares operational assets to the amount of sales the company has made over a given time period.
It indicates the amount of capital in the form of assets .
ncluding current and non-current asset.
Fixed assets are tangible assets that are owned for use in the manufacturing or delivery of goods or services, for leasing to third parties, or for administrative purposes.
they are anticipated to be utilized for a number of years, as stated by (Kartikahadi et al.
, 2.
Moreover, fixed assets are tangible, visible, and touchable resources stored for use in manufacturing or providing goods and services.
They are not stored for resale and are utilized over the course of many accounting periods.
The cost of purchasing fixed assets should be spread out over the time periods during which the assets' benefits can be realized.
This is accomplished by applying periodic depreciation charges.
Good Corporate Governance.
The Forum for Corporate Governance in Indonesia states that Good Corporate Governance (GCG) is a set of guidelines that define the rights and responsibilities of the government, employees, management, shareholders, creditors and other internal and external stakeholders.
Stated differently, it is a system that supervises and manages the business.
(Hitt et al.
, 2.
explained that corporate governance is a set of mechanisms used to manage relationships among stakeholders and to determine and control the strategic direction and performance of the organization.
Corporate governance, as explained by (Solomon, 2.
, corporate governance is the system of checks and balances, both internal and external to companies, which ensures that companies discharge their accountability to all their stakeholders and act in a socially responsible way in all areas of their business activity.
Business Strategy and Tax Avoidance.
Companies will achieve large profits if they succeed in implementing their business strategies, large profits will result in higher tax obligations, creating the probability that companies will engage in tax avoidance to maintain those large profits.
In the domain of business strategy, there are two contrasting One approach is called the defender strategy.
The other approach is called the prospector strategy.
(Pertiwi & Masripah, 2.
state that since the typical corporation is unable to establish a consistent competitive strategy year after year, business strategy has no bearing on tax avoidance.
Study by (Wahyuni et al.
, 2.
, (Sadjiarto et al.
, 2.
, and (Putri & Setiawan, 2.
has proven that business strategy influences tax avoidance.
However, different results were found by (Damayanti & Wulandari, 2.
, (Heriana et al.
, and (Pertiwi & Masripah, 2.
who founded that business strategy does not affect tax avoidance.
H1: Business strategy has an effect on tax avoidance.
Capital Intensity and Tax Avoidance.
Capital intensity, as defined by (Ross et al.
, capital intensity is a measure of a company's asset-based capital, which is represented in a ratio that compares operational assets to revenues during a specific time Companies use their fixed assets to control the expenses of depreciation, which lowers the company's profits and, consequently, its tax obligations.
The composition of assets that will influence the effective tax rate is shown by capital intensity, particularly Jurnal Akuntansi/Volume 29.
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fixed assets that will influence tax reduction through the ensuing depreciation expenditure.
The amount of capital required by the business to turn a profit is reflected in its capital intensity, and this capital might come from either a reduction in fixed assets or an increase in the quantity of fixed assets.
The cost of fixed asset depreciation is an additional expense for the business.
Reducing expenses that can be subtracted from profits in line with Article 6 of Law of the Republic of Indonesia Number 36 of 2008 concerning Income Tax is one strategy to lessen the company's tax liability.
One of these is capital intensity, in which the business uses the quantity of fixed assets it has to subtract the cost of maintaining those assets from its profit, resulting in a lower profit margin and lower tax payments.
Research by (Anggraini et al.
, 2.
, (Mailia & Apollo, 2.
, (Kalbuana et al.
, 2.
, (Pattiasina et al.
, 2.
(Hidayah & Ernandi, 2.
and (Sinaga & Suardhika, 2.
has demonstrated that tax avoidance is influenced by capital intensity.
However, different results were found by (Maulana et al.
, 2.
, (Afrianti et al.
, 2.
, (Ristanti, 2.
and (Putri & Setiawan, 2.
who came to the conclusion that avoidance of taxes is unaffected by capital intensity.
H2: Capital intensity has an effect on tax avoidance.
Good Corporate Governance as a Moderating Variable.
A strategy is a plan that will be used in an effort to improve and help achieve goals.
In competition, a good strategy will greatly help achieve goals more efficiently.
Business includes all business activities for profit that provide goods and services needed in an economic system.
So, in simple terms, a business strategy can be interpreted as a plan that will be used by companies in an effort to achieve business goals and compete in certain segments or markets in order to seize market positions, and strategies to get large sales and increase company profitability.
Corporate governance emerges as an effort to control or overcome opportunistic management actions by creating a system and control tools to create efficiency for companies that will benefit all parties.
Good governance practices guarantee that management has the interests of shareholders at the forefront of their minds.
This entails rules for boards of directors, standards for accounting and investor disclosure, well-crafted incentives for managers, and legal repercussions for management self-dealing.
Scandals indicate a breakdown in corporate governance.
Governance is functioning correctly when businesses compete successfully and ethically to provide value to shareholders (Brealey et , 2.
Good corporate governance, as measured by management and institutional ownership, influences the moderating effect of business strategy .
easured by capital intensit.
on tax avoidance, according to research by (Anugerah et al.
, 2.
In contrast, different findings were reported by (Afrianti et al.
, 2.
, and (Rosalin & Chrismastuti, 2.
, who discovered that the impact of business strategy through company growth and sales growth on tax avoidance cannot be modetared by good corporate governance.
Capital intensity explains the size of assets that a business unit invests in as fixed One component of the business unit that is in charge of monitoring the agent's administration of the company in accordance with the laws and regulations is the independent board of commissioners.
The business unit's efforts to raise investments in fixed assets that decrease profits are anticipated to be lessened by independent commissioners, which will ultimately result in lower tax liabilities.
The supervisorAos ability to present financial statements is in the realm of conducting supervision so as not to violate the provisions and support the best decision making to maximize company operations.
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Research by (Anugerah et al.
, 2.
and (Hidayah & Ernandi, 2.
confirms that the impact of capital intensity on avoidance of taxes can be moderated by good corporate However, different results were shown by (Sinaga & Suardhika, 2.
, (Afrianti et al.
, 2.
, (Ristanti, 2.
, and (Ghozali, 2.
, who revealed that the impact of capital intensity on avoidance of taxes cannot be moderated by independent commissioners as a proxy for good corporate governance.
H3: Good corporate governance moderates the effect of business strategy on tax H4: Good corporate governance moderates the effect of capital intensity on tax avoidance.
Based on the theoretical review and research findings, the research model is shown in the diagram below:
Business Strategy Tax Avoidance Capital Intensity Good Corporate Governance Figure 1.
Research Model Source: Processed by Researcher METHODS The research method used in the current study is quantitative.
In accordance with the stated issues and objectives, this study is categorized as causal research.
The population comprises 114 manufacturing businesses in the consumer non-cyclical sector listed on the Indonesia Stock Exchange from 2018 to 2022.
The sample technique employed in this study is purposive sampling.
A sample of 36 companies was selected, resulting in 180 data samples.
The criteria used include .
The Indonesia Stock Exchange listed companies that manufacture in the consumer non-cyclicals sector form 2018 to 2022.
The company publishes financial reports consistently during the observation period.
Complete data according to the research variables is accessible in the company's financial accounts.
The company did not experience losses during 2018 to 2022.
The company was not delisted during the observation period.
Companies that use rupiah in issuing financial This study utilizes panel data, and Eviews 13 software is used for statistical The analysis steps include Descriptive Statistical Analysis.
Panel Data Jurnal Akuntansi/Volume 29.
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Regression Analysis.
Panel Data Regression Estimation Methods.
Classical Assumption Tests.
F Test.
Coefficient of Determination (RA) Test, t Test.
Moderated Regression Analysis, and Multiple Regression Analysis.
Each variable's operationalization is shown in Table 1.
Table 1.
The Operationalization Variable Variable Business Strategy (Higgins et al.
Dimensions Production capability and goods and services Company Growth Rate Marketing Sales Indicator EMP/Sales = Total Employees Sales Scale Ratio MtoB = Stock Market Price Total Capital Market = Advertising Expenses Total Sales Ratio Capital Intensity Capital Intensity = Fixed Assets Total Assets Ratio Capital Intensity (Ross et al.
, 2.
Capital Intensity Capital Intensity = Total Fixed Assets Sales Ratio Tax Avoidance (Dyreng & et al.
Effective Tax Rate ETR = Current Tax Expenses Profit Before Income Tax Ratio Good Corporate Governance (Sugiyanto S & Fitria 2.
Institutional Ownership Managerial Ownership Independent Commissioner Audit Committee KI = Number of shares held by Institutions Total Outstanding Shares KM = Number of shares held by Manager Total Outstanding Shares KDKI = Number of Independent Commissioners Number of Board of Commissioners Members Number of Audit Committee Ratio Ratio Ratio Ratio Ratio Source: Processed by Researcher Variable business strategy in Table 1 shows the measurement of variable using four The sample of companies in the top quintile receives a score of 5, the sample of companies in the lower quintile receives a score of 4, and so on .
or capital intensity using reverse orde.
In additon, the first three proxies are Market.
EMP/SALES, and MtoB.
Based on these scores, the scores of each company for the four measures per year are summed up, resulting in a maximum score of 20 which is an indicator of the prospector strategy type .
core 13 to .
and a minimum score of 4 which is an indicator of the defender strategy type .
core 4 to .
RESULTS
Descriptive Statistical Analysis Results.
Therefore.
Table 2 displays the findings of this study's descriptive statistical analysis.
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Table 2.
Descriptive Statistical Analysis Business Capital Intensity Strategy Mean Median Maximum Minimum Std.
Dev.
Observations Source: Data processed with Eviews 13, 2024 Tax Avoidance Good Corporate Governance Table 2 shows business strategy has a minimum value of 0 per cent in 28 companies and a maximum value of 100 per cent in 17 companies.
Since some companies maintain a consistent strategy year after year while others adapt theirs, and since more companies employ defender strategies than prospectors, the mean value, which is smaller than the standard deviation value, suggests that business strategy levels do not vary among competing manufacturing companies.
Capital intensity has a minimum value of 2.
100 per cent at PT Millennium Pharmacon International Tbk for the 2022 financial year and a maximum value of 28.
per cent at PT PP London Sumatra Indonesia Tbk per 2020 financial year.
Since the subject of the study is a manufacturing company, it is thought to base its investment decisions more on fixed assets.
Investments in fixed assets, such as buildings, machinery, equipment, and vehicles, can support operational activities.
The capital intensity data using the fixed asset intensity ratio shows a significant amount of variance, as evidenced by the fact that the mean value is higher than the standard deviation value.
For the 2019 fiscal year, tax avoidance has a low of 0.
020 per cent at PT Smart Tbk and a maximum of 219.
140 per cent at PT Buyung Poetra Sembada Tbk.
The minimum value at PT Smart Tbk for the 2019 financial year is thought to be due to fiscal losses in 2015, 2016, and 2017 so that it is suspected that the company utilized the fiscal loss compensation in the 2019 tax calculation.
Consequently, there is a significant degree of variation in the tax avoidance data utilizing ETR since the mean value is higher than the standard deviation value.
Good corporate governance has a minimum value of 7.
630 per cent at PT Mustika Ratu Tbk in 2022, which means that Good Corporate Governance has not been implemented optimally.
In addition.
PT Malindo Feedmill Tbk's 2020 maximum value of 290 per cent indicates that the business has fully adopted good corporate governance.
As a result, the mean value exceeds the standard deviation value, suggesting that there is significant variation in the data on effective corporate governance as measured by institutional ownership, management ownership, an independent board of commissioners, and an audit committee.
Panel Data Regression Model Analysis Results.
The Chow and Hausman tests are used in the model selection process to test the regression equation that has to be estimated.
Following the Chow results.
H1 is accepted and H0 is denied, since the cross section chi square probability value of 0.
000 is less than the alpha value of 0.
This indicates that the fixed effect model is the proper data regression estimate, based on the Chow test Jurnal Akuntansi/Volume 29.
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The study's Hausman test results indicate the acceptance of H1 and rejection of H0, as the cross-section random probability value of 0.
011 is less than the alpha value of 0.
This finding suggests that the fixed effect model is the most appropriate data regression estimation based on the results of the Hausman test.
Multicollinearity Test Results.
Therefore.
Table 3 displays the findings of this study's multicollinearity test.
Table 3.
Multicollinearity Test Result Business Strategy Business Strategy Capital Intensity Tax Avoidance Good Corporate Governance Source: Data processed with Eviews 13, 2024 Capital Intensity Tax Avoidance Good Corporate Governance The correlation test results from the regression in Table 3 shows that none of the values in the matrix exceed 0.
Therefore, the model formed is free from violations.
Heteroscedasticity Test Results.
The results of the heteroscedasticity test in this study are shown in the Table 4.
Table 4.
Heteroscedasticity Test Results Variable Probability Business Strategy (SB) Capital Intensity (CI) SB*GCG CI*GCG Source: Data processed with Eviews 13, 2024 The heteroscedasticity test in Table 4 findings demonstrate that there is no evidence of heteroscedasticity because all variable probability values are over 0.
F-Test Results.
According to the study's f test results, the F-statistic probability value is 0.
which is below the 0.
050 significance level.
This indicates that either the regression model is considered feasible or the equation model in this investigation is valid.
Coefficient of Determination Test Result.
With an Adjusted R-squared value of 0.
284, the study's coefficient of determination test results suggest that changes in business strategy, capital intensity, and the application of good corporate governance account for 28.
410 per cent of the variation in tax avoidance.
Other factors not covered in this study have an impact on the remaining 71.
590 per cent.
t Test Result.
In addition.
Table 5 displays the findings of the t test used in this study.
Jurnal Akuntansi/Volume 29.
No.
September 2025: 426-445 DOI: http://dx.
org/10.
24912/ja.
Table 5.
t Test Result Variable Coefficient Business Strategy (SB) Capital Intensity (CI) Source: Data processed with Eviews 13, 2024 t-Statistic Prob.
With a value of 0.
869, the t-test findings in Table 5 demonstrate that the probability value for the Business Strategy variable is higher than the significance level ( is equal to This shows that H0 is accepted and H1 is rejected, proving that business strategy doesnAot effect on tax avoidance.
The probability value for the Capital Intensity variable is less than the significance level ( is defined as 0.
, with a value of 0.
This indicates that H1 is accepted and H0 is rejected, meaning that capital intensity does have an effect on tax avoidance.
Moderation Regression Analysis Test Results.
Thus.
Table 6 displays the findings of this study's moderation regression analysis test.
Table 6.
Moderation Regression Analysis Test Results Variable Coefficient Business Strategy (SB) Capital Intensity (CI) SB*GCG CI*GCG Source: Data processed with Eviews 13, 2024 t-Statistic Prob.
The results of the moderated regression analysis in Table 6 show that the probability value for the business strategy variable, moderated by the Good Corporate Governance variable, is greater than the significance level ( is defined as 0.
, with a value of 0.
This indicates that H1 is rejected and H0 is accepted, meaning that the good corporate governance variable does not have the ability to moderate the effect of business strategy on tax avoidance.
The probability value for the capital intensity variable, moderated by the good corporate governance variable, is also greater than the significance level ( is defined .
, with a value of 0.
This indicates that the good corporate governance variable is unable to moderate the impact of capital intensity on tax avoidance, as H1 is rejected and H0 is accepted.
Multiple Regression Analysis Results.
The following equation, which uses good corporate governance as a moderating variable, shows the relationship between the capital intensity and business strategy factors on tax avoidance based on the regression results in Table 6:
TA = 0.
145*SB - 0.
355*CI - 0.
114*SB(GCG) 0.
585*CI(GCG).
The interpretation of the first equation is that the level of tax avoidance would be 110 if capital intensity, business strategy, and good corporate governance were all zero.
This is shown by the constant .
value of 0.
The business strategy coefficient of 0.
shows that for every 1 per cent increase in tax avoidance, business strategy will increase Jurnal Akuntansi/Volume 29.
No.
September 2025: 426-445 DOI: http://dx.
org/10.
24912/ja.
520 per cent.
The capital intensity coefficient of Ae0.
355 indicates that for every 1 per cent decrease in tax avoidance, capital intensity will increase by 35.
450 per cent.
As a moderating variable of business strategy, good corporate governance has a coefficient of 0.
114, which means that for every 1 per cent reduction in tax avoidance, good corporate governance will increase the moderating influence of business strategy on tax avoidance 420 per cent.
Good corporate governance as a moderating variable of capital intensity, with a coefficient of 0.
585, shows that for every 1 per cent increase in tax avoidance, good corporate governance significantly amplifies the moderating impact of capital intensity on tax avoidance by 58.
510 per cent.
DISCUSSION