The Effect of Profitability on Tax Aggressiveness in Pharmaceutical Companies Listed on the IDX for the 2020–2024 Period

Abstract

This research is motivated by indications of tax aggressiveness practices among pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange (IDX). Such practices raise concerns regarding the level of tax compliance and the transparency of financial reporting. This research aims to examine the effect of profitability on tax aggressiveness. The study employs a quantitative approach using panel data regression analysis. Secondary data were obtained from the annual financial reports of pharmaceutical companies for the 2020–2024 period, downloaded from the official IDX website. The results show that profitability has a negative but not significant effect on tax aggressiveness. The coefficient of determination (R²) value of 0.018 indicates that the profitability variable explains only 1.8% of the variation in tax aggressiveness, while the remaining variation is influenced by other factors outside the model. These findings suggest that the level of profitability is not the main factor determining tax aggressiveness among pharmaceutical companies in Indonesia.