Institutional Ownership, Audit Quality, and Firm Size in Relation to Tax Avoidance in Indonesian Mining Firms

Abstract

Tax avoidance remains a concern in Indonesia's mining sector due to complex business operations and corporate tax planning practices. Inconsistent findings regarding corporate governance mechanisms and firm characteristics highlight the need for further investigation. Objective: This study aimed to examine the effects of institutional ownership, audit quality, and firm size on tax avoidance among mining companies listed on the Indonesia Stock Exchange during 2021–2025. Method: A quantitative associative design was employed using purposive sampling, yielding eight companies and 40 firm-year observations. Secondary data from annual financial reports were analyzed using fixed-effects panel regression in EViews 13, with Cash Effective Tax Rate (CETR) as the dependent variable. Findings: Institutional ownership (β = 0.462103; p = 0.5840) and audit quality (β = 0.057743; p = 0.1477) were not statistically significant, whereas firm size exhibited a significant negative association with CETR (β = −1.385202; p = 0.0004). The model yielded an adjusted R² of 0.416832. Implications: Firm size warrants consideration when evaluating corporate tax payment patterns, while ownership and audit characteristics require further examination. Originality: This study jointly evaluates three corporate characteristics using firm-level fixed effects in Indonesian mining companies during 2021–2025.