Corporate Social Responsibility and Capital Intensity in Tax Avoidance: The Moderating Role of Profitability

Nurhayati Nurhayati; Atri Nodi Maiza Putra; Ujang Kusnaedi; Putri Saphira

doi:10.61255/jeemba.v4i6.2180

Authors

Nurhayati Universitas Graha Ganesha, Indonesia
Atri Nodi Maiza Putra Universitas Bina Sarana Informatika, Indonesia
Ujang Kusnaedi Universitas Graha Ganesha, Indonesia
Putri Saphira Universitas Bina Sarana Informatika, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i6.2180

Keywords:

Corporate Social Responsibility, Capital Intensity, Profitability, Tax Avoidance, Effective Tax Rate

Abstract

Purpose – This study examines the relationship between Corporate Social Responsibility (CSR) and Capital Intensity with Tax Avoidance and investigates the moderating role of Profitability in Basic Materials companies listed on the Indonesia Stock Exchange. The study addresses the relevance of tax-related behavior in a sector characterized by substantial fixed-asset investment and increasing attention to corporate social and environmental responsibilities.

Design/methodology/approach – This study employs a quantitative explanatory approach using balanced panel data from 38 Basic Materials companies observed during 2022–2025, resulting in 152 firm-year observations. Data were obtained from annual reports, financial statements, and sustainability reports. CSR was measured using a disclosure index based on the GRI Standards 2021, Capital Intensity using the ratio of fixed assets to total assets, Profitability using Return on Assets (ROA), and Tax Avoidance was proxied by the Effective Tax Rate (ETR), calculated as income tax expense divided by pre-tax income, with lower ETR values indicating higher levels of tax avoidance. Panel regression and Moderated Regression Analysis were performed using EViews 14.

Finding/Results – The results show that CSR has no significant relationship with ETR, while Capital Intensity has a significant positive relationship with ETR, indicating an association with lower tax avoidance. Profitability does not significantly moderate either the CSR–ETR or Capital Intensity–ETR relationship.

Originality/Value – This study contributes empirical evidence from Indonesian Basic Materials companies by integrating CSR, Capital Intensity, and Profitability within a panel-data framework. The findings indicate that fixed-asset intensity is more closely associated with tax-related outcomes than CSR disclosure or profitability-based moderation in the observed sample.

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