|Title: THE EFFECT OF TAX AVOIDANCE ON THE COST OF DEBT: EMPIRICAL STUDY OF MINING COMPANIES IN INDONESIA
Sumarni and Surya Raharja
This study aims to examine the effect of tax avoidance and institutional ownership on the cost of debt. The dependent variable is the cost of debt (COD), the independent variable is tax avoidance (TA) as measured by the Effective Tax Rate (ETR) and institutional ownership (KI). The populations are energy sector companies in the mining sub-sector which are listed on the Indonesia Stock Exchange (IDX) 2017-2021. The sampling method used was purposive sampling, with a total sample of 106 observations. This study also uses 4 (four) control variables: company age (Age), company size (Size), leverage (Lev), and cash flow operation (CFO). Data processing uses SPSS, and uses multiple linear regression analysis. The results showed that TA did not have a significant impact on COD. Creditors do not consider that tax avoidance as a risky action, so the tax avoidance activities do not have an impact on the cost of debt. KI has a significant negative effect on COD. This means that the higher the proportion of institutional ownership, the lower the cost of debt. With supervision from institutional parties, it can reduce the use of debt to a certain amount.
|Keywords: Tax Avoidance, Cost of Debt, Institutional Ownership, Effective Tax Rate (ETR).