Putri Wahyuni, Muammar Rinaldi

Analysis of Profit Management in Agricultural Companies in the Plantation Sub Sector Listed on the Indonesia Stock Exchange, Through PPH Rates and Tax Planning

Introduction

Analysis of profit management in agricultural companies in the plantation sub sector listed on the indonesia stock exchange, through pph rates and tax planning. Analisis manajemen laba perusahaan agrikultur perkebunan di BEI. Meneliti dampak tarif PPH dan perencanaan pajak terhadap manajemen laba. Perencanaan pajak terbukti berpengaruh signifikan.

Abstract

This study aims to determine whether the corporate income tax rate and tax planning have a significant effect on earnings management in agricultural companies in the plantation sub-sector listed on the Indonesia Stock Exchange. The population in this study are plantation sub-sector companies listed on the Indonesia Stock Exchange as many as 19 companies. The research sample was 6 companies with purposive sampling technique. The results showed that corporate income tax rates had no significant effect on earnings management in plantation sub-sector companies listed on the Indonesia Stock Exchange, while tax planning had a significant effect on earnings management in plantation sub-sector companies listed on the Indonesia stock exchange. The results of the F test show that the variables of Corporate Income Tax Rate and Tax Planning have a significant effect on Earning Management in plantation sub-sector companies listed on the Indonesia Stock Exchange. The results of the coefficient of determination test indicate that the Earnings Management variable can be explained by the Corporate Income Tax Tariff and Tax Planning variables, while the remaining Earnings Management variables can be explained by other variables not examined in this study such as Leverage and Financial Performance.

Review

This study investigates the influence of corporate income tax rates and tax planning on earnings management within the specific context of agricultural plantation companies listed on the Indonesia Stock Exchange. The research addresses a pertinent topic, as earnings management strategies, particularly in relation to taxation, are crucial for understanding corporate financial reporting and market integrity. The abstract clearly states the objective of determining the significance of these two variables on earnings management. The findings indicate a nuanced relationship, with tax planning emerging as a significant driver of earnings management, while the corporate income tax rate, individually, does not appear to have a direct significant impact. From a methodological standpoint, the study identifies its population and sample size, utilizing a purposive sampling technique for selecting 6 companies out of a total of 19. While the focus on a specific sub-sector (plantation) in a particular market (IDX) provides valuable context, the relatively small sample size of six companies might raise questions regarding the generalizability of the findings, despite the clear and consistent results. The abstract provides distinct outcomes for individual variable effects (corporate income tax rate and tax planning), as well as a joint effect through the F-test, which indicates that both variables together significantly influence earnings management. This joint significance, alongside the individual non-significance of the tax rate variable, presents an interesting dynamic that warrants further detailed explanation in the full paper to fully understand the interplay. The mention of other explanatory variables like leverage and financial performance, which were not examined but could influence earnings management, hints at the acknowledged limitations of the model. The practical implications of this research are noteworthy, especially the finding that tax planning has a significant effect on earnings management. This suggests that the strategic actions companies take to minimize tax liabilities play a more direct role in shaping reported earnings than the statutory tax rate itself. For policymakers and investors in Indonesia, this distinction is critical, indicating that regulatory oversight might need to focus more on the nuances of tax planning practices rather than merely the prevailing tax rates. Future research could benefit from expanding the sample size to enhance statistical power and generalizability, potentially including other sub-sectors or a comparative analysis with different markets. Furthermore, delving into the specific types of tax planning strategies employed by these companies and their direct links to earnings management techniques could provide deeper insights. The paper makes a valuable initial contribution to understanding these complex relationships within a vital economic sector in Indonesia.

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