Capital Structure, Firm Size, Profitability, and Tax Avoidance: Investigating the Oil and Gas Industry of Pakistan

Abstract

The purpose of the study is to investigate the impact of capital structure, firm size, and profitability on tax avoidance and to examine the tax planning strategies implied in the oil and gas industry of Pakistan. Owing to its rapid expansion and enormous profits, the oil industry is a symbol of blue-chip businesses. One way it supports the economy is by increasing the nation's tax income. An analysis of the tax planning techniques suggested in this industry is essential for efficient legislation and departmental evaluation. In this research, the explanatory research method is implied, and only firm-specific factors are considered for analysis. The effect of capital structure, firm size, and profitability on corporate tax avoidance is examined by the Ordinary least squares (OLS) regression model. As per the results, capital structure has a negative association whereas firm size and profitability have a positive association with tax avoidance.