| Summary: | The objective of this study is to examine the effects of firm-specific
characteristics such as size, leverage, capital intensity, inventory intensity, ROA,
state ownership and public ownership on effective tax rates. Effective tax rates as
dependent variable are commonly used as a proxy to measure corporate tax
burden. Effective tax rates are measured by the ratio between current taxes and
earnings before interest and taxes (EBIT). This study is also aimed to examine
whether average effective tax rate on the period after implementation of the Law
Number 36 Year 2008 (year 2009) is lower than average effective tax rate on the
period before implementation of the Law Number 36 Year 2008 (year 2008). This
study is conducted using samples consisted of 149 firms (298 firm-years) from
seven business sectors which registered in Indonesia Stock Exchange (BEI) period
2008-2009. The results indicate that several firm characteristics such as leverage,
capital intensity and public ownership have significant effects on effective tax
rates. The negative coefficient values suggest that firms with higher leverage,
capital intensity and public ownership tend to have lower effective tax rates.
Furthermore, the result from paired sample t test shows that average effective tax
rate year 2009 (23,55%) is lower than average effective tax rate year 2008
(25,14%).
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