Do Audit Costs and Quality Curb Corporate Tax Agression? Insights from the Basic Materials Manufacturing Sector

Abstrak

The issue of tax aggressiveness in Indonesia, particularly among manufacturing companies in the basic materials sector, has become a major concern given the significant contribution of this sector to national tax revenue. This study aims to analyze the effect of audit fees and audit quality on tax aggressiveness in manufacturing companies in the basic materials sector listed on the Indonesia Stock Exchange during the 2019–2023 period. The research uses a quantitative approach with secondary data from financial statements, and tests are conducted on 162 samples using multiple linear regression analysis. The results show that audit fees have no effect on tax aggressiveness, while audit quality, as represented by Big 4 auditors, reduces tax aggressiveness. The practical implications of these findings suggest that high-quality audits will uncover aggressive tax practices, prompting companies to be more transparent and compliant with tax regulations. In addition, regulators can encourage auditors to play a greater role in improving tax compliance.