THE EFFECT OF RETURN ON ASSET AND INSTITUTIONAL OWNERSHIP ON TAX AVOIDANCE

Abstract

This study attempts to ascertain whether there is an effect of Return on Asset (ROA) and institutional
ownership on tax avoidance in manufacturing companies listed on the Indonesia Stock Exchange
(IDX) for the period of 2012-2017. The factors tested in this research are Return on Assets (ROA)
and institutional ownership as the independent variables and tax avoidance as the dependent variable.
The size of the population in this research was 125 manufacturing companies. The method of this
study was purposive sampling so that in the number of samples analyzed 42 samples of
manufacturing companies. Research data analysis uses multiple linear regression. The analysis
shows Return on Assets (ROA) has a positive effect on tax avoidance while institutional ownership
has no effect on tax avoidance.