The Effect of Transparency as a Moderator of The Effects of Tax Planning, Profitability, and Leverage on Firm Value

Abstract

This study aims to examine the effect of tax planning, profitability, and leverage on firm value, with transparency as a moderating variable, across 31 consumer non-cyclical companies (124 observations) listed on the IDX for the 2021-2024 period using Random Effect Model (REM) and Moderated Regression Analysis (MRA). The partial results demonstrate that tax planning has a significant negative effect because investors perceive aggressive tax efficiency as a future legal risk. Profitability has no significant effect as investors prioritize long-term stability over annual profit fluctuations. Conversely, leverage shows a significant positive effect because debt utilization is viewed as a signal of expansion commitment and an effective management discipline mechanism. Regarding moderation, transparency fails to moderate the effects of tax planning and profitability on firm value, but significantly acts as a strengthening moderator on the positive effect of leverage, as high corporate disclosure successfully mitigates financial risk concerns and bolsters market confidence.