Determinants of tax compliance: a study on individual taxpayers in Indonesia

Abstract

This study aims to analyze the effect of tax knowledge, tax complexity, and tax justice on taxpayers' trust and tax compliance as well as the differences in tax compliance levels in South Sumatra. The research is explanatory and takes a quantitative approach. The method of data collection used a questionnaire containing the variables and documentation outlined by the study. The research questions were tested using hypothetical compliance scenarios, with 900 registered individual taxpayers from five major cities in South Sumatra as participants. The researchers used confirmatory factor analysis (CFA) with the structural equation modeling (SEM) approach. Results of the research show that (1) tax knowledge has no effect on taxpayers' trust, (2) tax complexity has no effect on taxpayers' trust, (3) tax justice has an effect on taxpayers' trust, (4) tax knowledge has no effect on tax compliance, (5) tax complexity has no effect on tax compliance, (6) tax justice has an effect on tax compliance, (7) taxpayers' trust has an effect on tax compliance, and (8) there were differences in the level of tax compliance after the implementation of the SMS blast program.

Analysis of the Tax Compliance in the EU: VECM and SEM

“…These results are in line with the literature. For example, the positive and important impact on compliance from trust in the authorities has been found in various works [3,7,[9][10][11][14][15][16][17][18][19][20][21][22][23]. The trust variable was related to the voluntary compliance behavior, which may be more effective than the enforced compliance behavior.…”

“…The relationship between tax authorities and taxpayers has a significant effect on tax behavior [8]. The trust variable is positively associated with tax compliance [14][15][16] and has an important impact [7,[17][18][19][20][21][22][23]. Participation in tax non-compliance increases when trust is low [24].…”

Incorporating Tax Education into Non-Accounting Curriculum: A Malaysian and Indonesian Study

“…In Hong Kong, Kwok and Yip (2018) found that tax compliance is affected by tax education. Nasution et al (2020), who explore the determinants of tax compliance in Indonesia, found that tax knowledge does not affect a taxpayer's compliance. Nevertheless, a study by Kurniawan (2020) in Indonesia confirmed that the level of tax compliance increases with tax knowledge.…”

Efecto de las variables macroeconómicas sobre la recaudación tributaria en Ecuador, periodo 2000 a 2020

“…Newman y Nokhu (2018) y Nasution et al (2020) sostienen que los temas de aranceles fiscales y la corrupción deben tomarse en serio para impactar positivamente en el cumplimiento tributario. En ese mismo orden de ideas, Bird et al (2008) señalan que un Estado con corrupción rampante, conlleva a que los ciudadanos tengan poca confianza en la autoridad y, por tanto, un escaso incentivo para cooperar.…”