The Interplay among Sustainability Reporting, Gross Profit Margin and Corporate Tax Strategies

Abstract

This paper examines the intricate relationship between sustainability reporting, gross profit margin (GPM), and corporate tax strategies, particularly focusing on the role of corporate tax turnover ratio (CTTOR) as a moderating variable within coal mining corporations listed on the Indonesia Stock Exchange. The introduction posits that while the primary aim of companies is profit maximisation, this often leads to significant adverse effects on natural resources and the environment, necessitating a shift towards sustainable development practices. The study utilises a quantitative approach, analysing data from 32 coal mining companies over three years (2021-2023) to uncover how sustainability reporting impacts gross profit margins and how CTTOR modifies this relationship. Methodologically, the research employs multiple linear regression implemented through SPSS, alongside classical assumption tests, including normality, multicollinearity, heteroskedasticity, and autocorrelation. The findings affirm a positive correlation between sustainability reporting and GPM, indicating that enhanced sustainability practices lead to better financial performance. Moreover, CTTOR significantly strengthens this relationship, highlighting its role as a crucial factor in corporate tax strategies that can enhance profitability. The conclusion emphasises the importance of sustainability reporting in improving profit margins and compliance with tax regulations, advocating for broader adoption of sustainable initiatives among corporations to balance economic objectives with ecological responsibilities.