why the independent variable did not effect to dependent?

rossi_tawar94 · June 2016

Sorry for repost
Hi there i need ur help for my final research the title is:
"Effect of long term debt to asset ratio (ldta), debt to equity ratio (der), permanent difference, temporary difference, net income and commercial expense to corporation income tax (Cit)"

I used n 600 and multiple linear regression with spss 19

After processing data
Der and income tax effecting CIT

While

Ldta, permanent and temporary difference (fiscal correction), and commercial expense do not effect the CIT.

Its frustate when all of my variables are the include in income statement.
Where income statement result in profits and to calculating CIT by the profits.

How can i explain why commercial expense did not effect the CIT?

And why ldta, permanent and temporary difference did not effect CIT too..

Thank you in advance to reply my quest

SandyHood · June 2016

Dear rossi_tawar94

I see from the heading that this is the second time you have posted this thread.
I found it difficult to decipher what your question is. I suspect that this might have been the same problem for other people reading it.

I can say that an increase to the debt to equity ratio will lead to an increase in interest payable and that this provides a tax shield. Interest is a cost deducted when calculating profit. Where there is more interest payable the profit falls and the tax payable falls as a result.

In this respect the tax expense is dependent on the interest expense which is caused by the debt.

Perhaps if you could reword your question you might have a better response.

rossi_tawar94 · June 2016

Sorry to make you difficult to understand my ques.

About DER i already understand how to explain it.
but about my other variables i have troubled to explain it.

here is my problem:
My final research title:
Analysis effect of capital structure proxying by long-term debt to asset ratio (LDTA) and Debt to Equity Ratio (DER), fiscal correction (parting to permanent difference and temporary difference), Net sales and commercial expense to corporate income tax
payable on non financial corporation

so the independent variables are 6 they are:
LDTA,
DER,
permanent difference,
temporary difference,
net sales,
commercial expense.

with the dependent variable corporate income tax payable

I regressing all variables with multiple linear regression by spss 19
The result found that:
1. DER has effect significantly negative to Corporate income tax payable
2. Net sales has effect signifcantly positive to Corporate income tax

Variables not effected significantly to Corporate income tax payable:
3. LDAR
4. PERMANENT DIFFERENCE
5. TEMPORARY DIFFERENCE
6. COMMERCIAL EXPENSE

HOW TO EXPLAIN:
WHY LDAR DIDNOT AFFECTED TO CORPORATE INCOME TAX PAYABLE?

WHY PERMANENT DIFFERENCE DIDNOT AFFECTED TO CORPORATE INCOME TAX PAYABLE?

WHY TEMPORARY DIFFERENCE DIDNOT AFFECTED TO CORPORATE INCOME TAX PAYABLE?

WHY COMMERCIAL EXPENSE DIDNOT AFFECTED TO CORPORATE INCOME TAX?

Nb:
MY INDICATOR OF CORPORATION INCOME TAX PAYABLE IS
Income taxable x taxes tariff

MY INDICATOR OF LDAR
long term debt / total asset
mean: show the percentage of assets budgeting by long term debt

MY INDICATOR OF PERMANENT DIFFERENCE IS
all expense and income and so on that didnt permitted by tax regulator to deduct in taxes calculation

MY INDICATOR OF TEMPORARY DIFFERENCE IS
Depreciation, deplection, or amorization, expense and income that had different times to recognition between taxes regulator and companies. But will be the same after several times.

MY INDICATOR OF COMMERCIAL EXPENSE IS
Cost of the goods sales+sales expense/marketing+administration and general expense

So can anyone explain why it didnt affect dependent besides of the reason that my data didnot inputed correctly

thanks in advance

why the independent variable did not effect to dependent?

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