Lease Capitalization: Does Tax Aggressiveness Increase?

This research aims to explore the impact of the new leasing concept in Indonesia's generally accepted accounting principles (PSAK 73), which is presented as an issue illustrating the phenomenon of tax aggressiveness in companies. Is the change in the lease concept one of the strategies taken by companies to reduce tax liabilities, and how effective are the tax regulations in tackling the practice of tax aggressiveness? The research focuses on 128 manufacturing firms listed on the Indonesia Stock Exchange between 2020 and 2023, yielding 344 observations. Simple random sampling was used to select the sample, and multiple regression analysis was performed using IBM SPSS Statistics version 26 to test the hypotheses. The research findings show that changes in the concept of rent in the latest accounting standards are one of the strategies taken by companies to reduce their tax liabilities. Due to the difference in the concept of rent compared to tax regulations and capitalization of rent which results in recording a larger expense at the beginning, companies can use the loopholes in the new accounting standards to reduce their tax liabilities. This study suggests that the discrepancies between tax regulations and accounting standards may influence the degree of tax aggressiveness.