Effective tax rate in Indonesia is relatively high when compared to some other ASEAN countries. High effective tax rate can affect company’s future growth prospects. This study aims to examine the impact of effective tax rate on the growth prospects of companies with earnings performance as moderating variable. The sample used was financial services companies listed on the Indonesia Stock Exchange in the period 2009-2018, with a total of 301 firm-year observations. This study used multiple regression analysis for panel data with the fixed effect method. The results revealed that effective tax rate had a significant negative impact on company’s growth prospects. Meanwhile, earnings performance, as a moderating variable, did not have a significant impact on the weakening of the negative effect of effective tax rate on company’s future growth opportunities. The results of this study are expected to be a reference for the government in setting tax rates in the future by considering that tax rates can have an impact on company’s growth potential.
|Pages (from-to)||540 - 548|
|Journal||Journal of Applied Economic Sciences|
|Publication status||Published - 2020|