The Optimum Level of Tax Compliance Based on Power of Authority and Trust in an Antagonistic Climate

Abstract

This study aims to determine the optimum level of tax compliance. The optimum level is used for evaluation of tax compliance at one time period. Power of auhtority dan trust in authority are applied to explain tax compliancel based on Sliperry slope framework. This research used tax report that presented in the financial statements. All data processed from 105 companies listed in the Indonesian capital market during 2007-2015. Power of authority is measured by probability audit and fines, while appeal to the tax court for trust in authority, and ratio tax burde to income before tax for tax compliance. The optimum point is performed by first differential function of Tax compliance on Power of Authority and Trust in Authority. The result tax compliance is below the optimum level, power of authority and trus in authority are above the optimum level. Increased tax compliance is conducted through inspection procedures effectively, the determination of fair fines, and the use of administrative systems based on technology that can be accessed by taxpayers. Tax authority should be able to change from antagonistic climate into synergetic climate.

The Influence Of Audit Probability, Sanction Severity, And Social Norms On Enforced Tax Compliance With Patriotism As Moderation

“…This authority can pose a threat by increasing taxpayers' risk of avoiding their tax obligations. As a counterbalance, tax authorities are granted the authority by law to enforce rules rigorously, thereby compelling taxpayers to comply with tax regulations (Prihandini, 2018).…”

Factors Affecting Tax Compliance of MSMEs in Dipolog City

“…Tax inspections have a positive impact on reducing tax evasion because they prevent tax fraud at an early stage and force taxpayers to comply with tax laws. Accordingly, a research conducted by Prihandini (2018),from his study of the optimal level of tax compliance in a hostile climate based on authority and trust, he said that through an effective tax inspection voluntary compliance will increase. If the tax inspection is carried out in an unreasonable manner and the examination process is distressing to the taxpayer, this will result in a negative attitude toward the tax officials.…”

Humanitarian news frame in Harian Republika and Kompas on Wamena ferugees (framing analysis on Republika news and Kompas edition 24 – 30 September 2019 on the tragedy of the riots in Wamena)

“…Republika daily newspaper and Kompas are two national media that have the characteristic of various interests, such as the economy, and different ideologies. The events presented by the media are the result of selection, where important events will be newsworthy (Prihandini, 2018).…”

“…The news frame formed by Republika Daily and Kompas is based on religious aspects, the establishment of a government setting, and a strong mission vision. In other words, the constructionist views of the two media are interesting to discuss at the news of the tragedy of the riots in Wamena City, Papua Province (Prihandini, 2018).…”