The Influence of Capital Intensity, Inventory Intensity, and Profitability on Tax Aggressiveness with Debt Levels as a Moderating Variable

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INTRODUCTION
One of the sources of state finance is taxes, where taxes are one of the most important supports for state financing. Tax contribution to state revenue reaches 80%. Even though tax revenue has increased every year, there are always deficiencies so that the tax target is not achieved like the current Covid-19 pandemic. According to data (www.bps.go.id, 2022) state tax revenue has decreased. In 2019-2021 the Covid-19 pandemic occurred which caused many companies to go bankrupt, so that the amount of company income will affect the payment of income tax to the company. In order to reduce the income tax paid to the government, companies usually carry out tax aggressiveness by reducing the profits earned by the company. That way people's economic activities are also very limited during the Covid-19 pandemic. Meanwhile, tax performance and economic recovery have started to increase from the impact of the co-19 pandemic since 2021. A firm will make an investment in the form of fixed assets, and the company will do depreciation to calculate the amount of tax that must be paid and how the funds will be utilized to generate a profit (Ratnawati & Utomo, 2022). A high inventory intensity of a company can help reduce the amount of tax payments.  states that when inventory intensity results in an increase in profit due to additional costs, as a result it will cause an increase in tax payments so that companies will carry out tax aggressiveness. (Suhendar et al., 2022) said the effectiveness of a company's work processes in identifying a company's ability to seek profit can use profitability. Company profits will be used to pay shareholders. The company will carry out tax aggressiveness if the level of profit earned by the company increases (Kasmir, 2017). Leverage is used to increase a company's ability to achieve its goals, both small and large. Companies that are in debt do not carry out tax aggressiveness because companies have interests with creditors, so companies must maintain their profits (Santini & Indrayani, 2020). (Iswari et al., 2019) emphasized that tax aggressiveness refers to tax payment schemes implemented by management, both legally and criminally, with the intent of manipulating corporate income as the basis for tax collection.
There are several things that distinguish this research from previous research by changing the independent commissioners' moderation variable to leverage moderation on the LQ45 company index for 2017-2021. The reason the authors chose the leverage variable in this study is because companies with high debt ratios have a high level of tax aggressiveness. This occurs because corporate debt increases interest expense, which in turn reduces company profits.
This study's objective was to investigate the impact of capital intensity, inventory intensity, and profitability on tax aggressiveness, with debt level serving as a moderating variable, for the LQ45 firm index from 2017 to 2021. This research has benefits for companies for contributing thoughts and references for company owners, managers, regulators, and investors in decision-making actions regarding tax aggressiveness.

Positive Accounting Theory
The purpose of positive accounting theory is to provide an overview of the accounting process running from the beginning to the present and accounting information to be presented so that it can be communicated to related parties. This theory is based on the fact that stakeholders, shareholders and tax authorities try to be persistent in maximizing their activities, which from time to time can also affect the compensation and welfare received. According to Watts & Zimmerman, (1986) there are 3 hypotheses that can be a reference for explaining and predicting events in accounting. Of the three existing hypotheses, this study uses the positive cost hypothesis.
If the conditions don't change, then the profit is relatively large, so it's the same as the company returning current profits to the future. Regarding tax aggressiveness, companies with higher profits in the current period will pay higher tax payments. The bigger the company, the more resources it will require and the company will carry out tax planning with the aim of saving tax payments. To reduce the number of current profit periods, company management has made preparations to move the current profit period to the next period (Amalia, 2021). (Balakrishnan et al., 2019) stated that various forms of tax planning are used by the business world to monitor their own tax obligations, so companies take tax aggressive actions which of course must be sanctioned because their actions are very detrimental to society. The effective tax rate (ETR) is the calculation used in this study. (Iswari et al., 2019) states that tax evasion is an act in which illegal tax planning is carried out. Usually companies that carry out tax aggressiveness have the goal of reducing the burden of paying taxes. This action is carried out to minimize or reduce tax costs .

Tax Aggressiveness
The company will carry out a plan or scheme to avoid paying taxes. Companies that have a savings plan in paying taxes will tend to be tax aggressive, this needs to be considered in fulfilling taxes by looking at the regulations set by the government (Putri Malinda et al., 2022).

Inventory Intensity
If the intensity of invested capital in the form of fixed assets is different from the intensity of inventories that invest in the company's inventory.  states that companies that invest a lot in inventory are referred to as inventory intensity. (Meylina & Manalu, 2022) states that inventory is a company's current current assets that are used to produce goods to be sold or used in the future.
Any business that invests in inventory will incur costs for growing and managing inventory. This can lead to reduced company profits and increase company costs. Companies with high inventory intensity will tend to do tax aggressiveness. Companies can increase company profits by making cost savings when inventory intensity increases. That way the company can allocate current year's profit to the next period when inventory is high. Therefore, the company will reduce profits so that it will also cause a smaller tax burden to be paid (Ahdiyah & Triyanto, 2021). (Jumono et al., 2019) stated that profitability is a tool used to evaluate a company's internal operations. With this profitability will help the company to achieve its final goal. According to (Mauren & Purwaningsih, 2022) profitability is the main key to the long-term success and survival of the company, which is reflected in the return on company assets. Increased company profits can show an increase in profitability ratios as well. The greater the profitability value, the greater the company's performance in terms of profit generation.

Profitability
An increase in profitability will result in a rise in tax value; hence, corporations tend to engage in tax aggression. A corporation use a profitability ratio to measure its capacity to make profits. Profitability ratios can indicate the efficiency of a company's management (Sari et al., 2021). Additionally, revenue is utilized to evaluate the location of the company's earnings in the prior year and in the current year.

Leverage
According to (Nilmawati et al., 2021), leverage is the ratio that compares corporate assets to company debt and measures the company's usage of debt in relation to the cost of company assets. The ratio is used to measure leverage, which is a liability possessed by the company. Leverage can improve a company's ability to achieve both modest and broad objectives (Gunawan & Resitarini, 2019). It indicates the company's ability to meet its commitments with its assets, or how much of its assets must be liquidated in order to settle all of its liabilities. It illustrates the company's total debt burden (Tahir et al., 2020). (Vijayakumaran & Vijayakumaran, 2019) state that with leverage, companies can finance assets with borrowed funds and describe the company's financial risks. Companies that finance their assets using debt borrowed from third parties or creditors will usually incur interest costs that must be paid. The Relationship between Capital Intensity and Tax Aggressiveness Fixed assets show the wealth shown by the companies because the more companies invest their fixed assets, the more companies bear depreciation costs. This utilization will have an impact on decreasing company profits. Companies that invest their capital in the form of fixed assets can take advantage of depreciation costs which are a deduction from the tax burden. This provides a choice of accounting theory when companies invest in assets, allowing them to choose the depreciation method they deem appropriate to increase company profits, and positive accounting theory exists to increase profits according to (Santini & Indrayani, 2020).
So when the company's capital intensity ratio increases, tax aggressiveness will increase. Thus, to manage the company, it will use unused funds to invest in fixed assets and get profits from depreciation which will later be used for corporate tax deductions (Marlina et al., 2022). So along with the increasing intensity of activity in a company, the tax aggressiveness practices carried out by the company will also increase as well. Thus, the hypothesis is as follows: H1 : Capital intensity is positively related to tax aggressiveness.

The Relationship between Supply Intensity and Tax Aggressiveness
According to (Ahdiyah & Triyanto, 2021), inventory intensity represents how much a company invests in its own inventory. Companies with a high level of inventory intensity are typically tax aggressive. Companies with large inventories will also have large inventory costs. Maintenance and inventory costs will also help break down profits and tax payments that companies will make to the state. Managers will try to minimize the tax burden by having a large inventory so that profits will decrease. Therefore, companies apply positive accounting theory in choosing profitable jobs, with the assumption that companies will succeed in making high investments in the future and enjoy lower tax payments.
Consequently, if a company's inventory intensity is high, its tax aggressiveness will increase. This is consistent with the findings of (Sumiati & Ainniyya, 2021) that inventory intensity positively affects tax aggression. Thus, the following is the hypothesis: H2 : Inventory intensity is positively related to tax aggressiveness.

The Relationship between Profitability and Tax Aggressiveness
Researchers use ROA to measure company profitability, according to (Aksoy Hazır, 2019) profitability has a relationship between company profits and income tax burden for companies. High profits can trigger tax aggressiveness for companies with high profitability values that can be described as company efficiency, high tax costs due to the high profits that the company has. It is viewed as an attempt to engage in tax aggression. Profitability can be accomplished by supplying information about the company's profits, and tax aggressiveness can be attained if the company's profits are increasing. There are substantial political consequences, including high taxation. The larger the attained profitability, the bigger the company's profitability. The results are consistent with research (Dianawati & Agustina, 2020) and (Hidayat & Dewi, 2022) indicating that the ROA ratio influences the amount of tax aggression. Therefore, the hypothesis is the following: H3 : Profitability is positively related to tax aggressiveness.

Leverage Moderation on the Relationship between Capital Intensity and Tax Aggressiveness
Leverage compares the company's assets to its debt and gauges the company's utilization of its debt in relation to the cost of its assets. In assessing the company's ability to meet its long-term obligations, the leverage ratio might be utilized (Suyono, 2018). Companies with significant levels of debt will incur substantial interest costs. In addition, these expenses can affect the firm's profitability. Decreasing company profits causes the effectiveness of companies in managing the company's tax burden to decrease and shows an increase in tax aggressiveness.
So when the company's leverage ratio increases, the tax aggressiveness will increase. If the amount of leverage used to invest in the form of fixed assets so that it can take advantage of high depreciation costs to reduce the tax burden on the company. Positive accounting theory explains the decline in corporate earnings reports. Conflicts between managers and government may arise due to political costs when viewed as sharing responsibility for the social good of society. Tax obligations are the guidelines for the state regarding this matter. Management will report low profits in order to avoid paying high taxes, that is because the company's income is high, the taxes paid will also be high.
So the results are in line with research (Afiana & Mukti, 2020) which states that if capital intensity increases, tax aggressiveness will also increase, this will be strengthened by leverage, but not supported by (Ratnawati & Utomo, 2022). Thus, the hypothesis is as follows: H4: Leverage positively moderates the relationship between Capital Intensity and Tax Aggressiveness.

Leverage Moderation on the Relationship between Inventory Intensity and Tax Aggressiveness
The level of debt or leverage is typically represented by the company's obligation to repay debt. Inventory intensity is a measure of how much a firm invests in inventory; if a company has a large inventory, it will incur a greater burden in managing that inventory. The positive theory of accounting shows that conflicts generally occur in companies due to fund allocation problems. (Gita et al., 2021) explains that the leverage exercised by the entity will be able to provide additional funds to purchase inventory for the entity concerned, even though it must bear the interest expense on this obligation. This is in line with the idea (Marlina et al., 2022) that there is a close influence between leverage, inventory intensity, and tax aggressiveness. Thus, the hypothesis is as follows: H5 : Leverage positively moderates the relationship between Inventory Intensity and Tax Aggressiveness. (Kasmir, 2017) states that a company's profitability indicates the period in which it will create money. Taxes paid by the company will be directly proportional to its income, so a rise in profits will result in a greater tax burden for the company. In order for businesses to profit from these tax benefits, they must increase their overall debt, resulting in a high total debt to asset ratio. According to (Alexander & Minnema, 2018), for this indicator to be theoretically more beneficial for the organization, it must have a high level of total debt, implying a positive association between total debt and profitability.

Leverage Moderation on the Relationship between Profitability and Tax Aggressiveness
According to the research of (Hidayat & Dewi, 2022), there is a close relationship between leverage, profitability, and tax aggression. Thus, the following is the hypothesis: H6 : Leverage positively moderates the relationship between Profitability and Tax Aggressiveness From the hypothesis above, the following is the research model framework:

METHOD
This research was conducted using ETR. ETR is determined by dividing total income tax expense by total pre-tax profit. The Tax Aggressiveness Measurement utilizing ETR can address the existence of issues and constraints. This quantitative research employs secondary data acquired from a variety of sources. This research requires information from the annual financial report (annual report) of the LQ45 company index for 2017-2021, which includes 45 companies listed on the Indonesia Stock Exchange. The technique of purposive sampling utilized in this study yielded the following results: 45 LQ45 companies listed on the Indonesia Stock Exchange (IDX) in 2017-2021, 28 companies that present incomplete annual financial report data, 28 companies that do not generate profits, and 17 companies multiplied by 5 years. Therefore, the collected sample data is 85.
Using the econometric views software, this study employed the panel data regression analysis technique (Eviews 12). This study's data analysis includes descriptive statistical tests (mean, The profitability variable or proxied by ROA has the lowest value of 0.004000 which is owned by Aneka Tambang Ltd (ANTM) and the highest value of 0.723000 indicated by the company Sumber Alfaria Trijaya Ltd (AMRT) in 2021, the median value is 0.098000 and the standard deviation (level of data distribution) is 0.116531. It can be assumed that the average value of profitability on the LQ45 company index from 2017 to 2021 is 0.125 or 12.5%.
The leverage variable or proxied by DER has the lowest value of 0.041000 indicated by the company Charoen Pokphand Indonesia Ltd (CPIN) in 2021 and the highest value of 3.4113000 indicated by the company Unilever Indonesia Ltd (UNVR) in 2021, the middle value 0.643000 and the standard deviation (level of data distribution) is 0.763282. It can be assumed that the average leverage value on the LQ45 company index from 2017 to 2021 is 0.873 or 87.3%.
The tax aggressiveness variable or proxied by ETR has the lowest value of 0.146000 which is owned by Astra International Ltd (ASII) in 2020 and the highest value of 0.718000 indicated by the company Aneka Tambang Ltd (ANTM) in 2019, the middle value 0.243000 and the standard deviation (level of data distribution) is 0.086196. It can be assumed that the average value of tax aggressiveness on the LQ45 company index from 2017 to 2021 is 0.255 or 25.5%

Panel Data Regression Model Selection Chow Test
In the Chow test of the two models that have been carried out, both have a prob value. Cross-Section F and Ci-Square which is smaller than 0.05, with these results means that the hypothesis is rejected. So it was concluded that the Fixed Effect model was the best and data testing continued to Hausman.

Hausman Test
Based on the Hausman test of the two models that have been tested, the value in model 1 is p = 0.2259 > 0.05 and the value in model 2 is p = 0.7131 > 0.05, meaning that the Random Effect Model is the best model. The Lagrange Multiplier (LM) test must be continued because the Random Effect Model (REM) was selected by the Chow test and the Hausman test.

Lagrange Multiplier Test
After the Chow test and Hausman test were carried out with the best model results, namely REM, then proceed to the LM test. Based on the two models that have been tested, the probability values of the Cross-Section are 0.0000 <0.05 and 0.0001 <0.05, meaning that the best method is the Random Effect Model..

Best Panel Data Regression Model
The following table summarizes the results of the panel data regression model selection test performed on each model.

Classic assumption test Multicollinearity Test
Based on the sample data that has been tested, the results of all variables are below 0.80. It can be concluded that the independent and dependent variables in this study are free from multicollinearity.

Heteroscedasticity Test
Based on the tested sample data, the probability value is more than 0.05. It may be stated that heteroscedasticity does not exist between the independent and dependent variables in this study.

Panel Data Regression Analysis
Based on the findings of the panel data regression analysis test, the equation model between variables can be formed as follows: The constant value in this study is -1.518, meaning that the independent variable has a value of 0. Then the tax aggressiveness of the LQ45 company index for the period 2017 to 2021 is predicted to be -1.518. Based on the research sample data, the results of capital intensity are related to tax aggressiveness with a value of 0.111, meaning that the capital intensity variable has an increase in value of 0.111 to tax aggressiveness, which indicates that the coefficient is positive. Inventory intensity variable has an impact on tax aggressiveness with a value of 0.062, meaning that the inventory intensity variable has an increase in value of 0.062 on tax aggressiveness, indicating that the coefficient is positive. The Profitability variable is related to tax aggressiveness with a value of 0.182, meaning that the profitability variable has an increased value of 0.182 to tax aggressiveness, which indicates that the coefficient is positive.
Leverage and tax aggressiveness variables with a value of -0.066, meaning that the leverage and tax aggressiveness variables have decreased in value -0.066. Leverage variable can moderate the relationship between capital intensity and tax aggressiveness with a value of -0.093, meaning that leverage moderation has decreased the value of -0.093 on capital intensity and tax aggressiveness, which indicates that the coefficient is negative.
The leverage variable moderates the relationship between inventory intensity and tax aggressiveness with a value of -0.024, meaning that leverage moderation has decreased by -0.024 on inventory intensity and tax aggressiveness, indicating that the coefficient is negative. The leverage variable moderates the relationship between profitability and tax aggressiveness with a value of 0.372, meaning that leverage moderation has increased by 0.372 on profitability and tax aggressiveness, which indicates that the coefficient is positive.

Panel Data Hypothesis Test T-Test (Partial)
The t (partial) statistical test has measurement provisions, namely the prob value. on Eviews research <0.05 then the variable is accepted or significant, conversely if the value is > 0.05 then the variable is rejected or not significant to Y or ETR. Based on the results of the T test with a significance level of 0.05, this

Positive Hypothesis Accepted
Source: Data proceed

Test Eviews for Moderation
Moderation can be examined by searching for significant interactions between the moderating variable (Z) and the independent variable (IV) (X). Notably, it is essential to mean-center both your moderator and your dependent variable in order to reduce multicolinearity and facilitate interpretation.

Simultaneous Significance Test F
Simultaneous results of research sample data show the results of the prob value (F-statistic) of 0.000282 less than 0.05 so that it can be interpreted that capital intensity, inventory intensity, profitability are simultaneously related to tax aggressiveness.

Coefficient of Determination
Based on the sample data that has been tested, it shows that the Adjusted R-Squared value is 0.192428 (19.2%) which means that the overall ETR ratio has an impact on the Capint, IP and ROA ratios. While the remaining 80.8% is explained by other variables outside the research model.

Effect of Capital Intensity Relationship and Tax Aggressiveness
Capital intensity is positively associated to tax aggression on the LQ45 company index on the Indonesia Stock Exchange (IDX) from 2017 to 2021, according to the study's findings, so H1 is acceptable. These results are consistent with research (Ahdiyah & Triyanto, 2021) and (Afiana & Mukti, 2020) which states that capital intensity is positively related to corporate tax aggressiveness. So when the company's capital intensity ratio increases, tax aggressiveness will increase. Thus, to manage the company, it will use unused funds to invest in fixed assets and get profits from depreciation which will later be used for corporate tax deductions (Marlina et al., 2022). So the higher the tendency of the intensity of the company's fixed assets, the higher the tax aggressiveness practices will be carried out.

The Influence of Supply Intensity and Tax Aggressiveness Relationship
Inventory intensity has a positive correlation with tax aggressiveness for the LQ45 company index on the Indonesia Stock Exchange (IDX) for the period 2017 to 2021, hence H2 can be disregarded.
Research (Sormin, 2021) and (Sumiati & Ainniyya, 2021) indicates that inventory intensity has a beneficial influence on tax aggression. This is consistent with the research of (Sugeng et al., 2020), which argues that inventory as an investment is not the best strategy for minimizing the tax burden because companies with higher levels of inventory are viewed as being at a disadvantage due to inventory that has been stored for an extended period of time expiring or having been damaged.  states that low additional inventory costs will increase company profits with lower additional inventory costs and company profits will increase, which indicates that the company will not be able to take advantage of additional inventory costs to reduce tax payments.

The Influence of Profitability Relationship and Tax Aggressiveness
According to the findings of the study, profitability is positively correlated with tax aggressiveness for the LQ45 company index on the Indonesia Stock Exchange (IDX) from 2017 to 2021, therefore H3 is acceptable. These findings are consistent with research (Dianawati & Agustina, 2020) indicating that profitability influences the amount of tax aggression. As a result of being able to engage in tax planning, companies with a high profit margin will be able to minimize their overall tax burden. When a corporation's profits are greater, its income tax liability and tax aggressiveness also grow. As a result, the company will be more aggressive in avoiding its tax obligations. When the company receives high profits in the current period, the amount of tax paid will be higher. This condition can increase the tendency of companies to carry out taxes (Suhendar et al., 2022).

The Effect of Leverage Moderation on the Relationship between Capital Intensity and Tax Aggressiveness
Therefore, H4 can be refused. According to research (Afiana & Mukti, 2020) and (Marlina et al., 2022), if capital intensity increases, tax aggression will also increase and will be increased by leverage.
In accordance with the research of Ratnawati and Utomo, companies do not use leverage to provide fixed assets and reduce the tax burden in manufacturing companies. Instead, leverage is used to finance company operations, so that the depreciation profit that should be used as a large corporate tax deduction for corporate tax payments cannot be reduced or the company cannot be tax aggressive.

The Effect of Leverage Moderation on the Relationship of Inventory Intensity to Tax Aggressiveness
The study's findings indicate that leverage positively moderates the association between inventory intensity and tax aggression for the LQ45 company index on the Indonesia Stock Exchange (IDX) from 2017 to 2021, hence H5 can be rejected. This contradicts scientific findings (Marlina et al., 2022) which states that there is a strong influence between leverage, inventory intensity, and tax aggressiveness. This is in line with Research og (Suyono, 2018). The company does not use leverage to own inventory and additional costs to reduce its tax burden, so the company chooses not to carry out tax aggressiveness or pay the tax burden according to the company's situation. Most companies prefer to use leverage to maximize profits for shareholders. The company will increase profits and reduce the tax burden if the intensity of the company is higher (Pasaribu & Mulyani, 2019).

The Effect of Leverage Moderation on the Profitability Relationship Against Tax Aggressiveness
Therefore, H6 is okay. This is consistent with the findings of Hidayat and Dewi's research from 2022, which indicates a close relationship between leverage, profitability, and tax aggression. Taxes paid by the company will be directly proportional to its income, so a rise in profits will result in a greater tax burden for the company. In order for businesses to profit from these tax benefits, they must increase their overall debt, resulting in a high total debt to asset ratio. According to (Alexander & Minnema, 2018), for this indicator to be theoretically more beneficial for the organization, it must have a high level of total debt, implying a positive association between total debt and profitability.

CONCLUSION
Based on the results of the author's research, it can be stated that the purpose of this study was to examine the impact of capital intensity, inventory intensity, and profitability on tax aggressiveness, with leverage as a moderating variable, for the LQ45 companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. Capital intensity, inventory intensity, and profitability are simultaneously associated to tax aggressiveness, and all independent variables modulated by leverage are simultaneously connected to tax aggressiveness. The link between capital intensity and tax aggressiveness is positive, suggesting that as capital intensity rises, corporations tend to be more tax aggressive. There is no substantial association between inventory intensity and tax aggressiveness, therefore a company's inventory intensity has little effect on its ability to reduce tax payments. Significantly positive correlation exists between profitability and tax aggressiveness, indicating that an increase in the profitability of a company will result in an increase in company profits, so that the company will use positive accounting methods to reduce profits, thereby reducing the amount of tax paid by the company. And leverage does not modify the link between capital intensity and inventory intensity and tax aggressiveness. In the meantime, leverage can dramatically decrease the connection between profitability and tax aggression.