Assessing the Nexus Between Corporate Tax Avoidance and Firm Performance: A Comprehensive Analysis of Selected Indian Pharmaceutical Companies

Author(s)	Mr. Rachu Sharanappa Balegar, Ms. Sahana Gurusiddayya Hiremath, Ms. Varshini Hiremath, Dr. Mahesh Bendigeri
Country	India
Abstract	Corporate tax planning plays an important role in managing a company's finances by reducing tax liability within legal boundaries while supporting growth and compliance. This study examines the relationship between corporate tax avoidance and financial performance among six leading Indian pharmaceutical companies using panel data from FY2020–21 to FY2024–25. Correlation and multivariate regression analyses were conducted using Book-Tax Avoidance (BTA), Effective Tax Rate (ETR), firm size, leverage, and export intensity as independent variables, with Return on Assets (ROA) and Return on Equity (ROE) as performance measures. The findings reveal that Book-Tax Avoidance positively influences ROA and ROE, leverage has a significant negative impact, export intensity positively affects profitability, and firm size has no significant effect. The study concludes that effective tax planning and prudent capital structure management contribute significantly to firm performance.
Keywords	Corporate Tax Avoidance, Tax Planning, Financial Performance, Pharmaceutical Companies, ROA, ROE, Leverage, Export Ratio, India
Published In	Volume 8, Issue 4, July-August 2026
Published On	2026-07-24

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