Does tax amnesty influence intention to comply?: If students are taxpayers already
Abstract
Purpose – The implementation of the tax amnesty program in Indonesia is expected to increase the intention to comply. However, the effectiveness of the program is likely to depend on the intention of taxpayer compliance. The purpose of this study is to examine differences in the intention of taxpayer compliance based on perceived justice and the taxpayer’s attitude of the government.
Research methodology – Primary data was obtained through experimental research involving 117 students who were enrolled in the taxation class. To ensure that participants understand their role as taxpayers in an experiment, a role test is performed and this also acts as a test of internal validity.
Findings – The results showed that there was a difference in the intention to comply based on perceived justice over the implementation of tax amnesty and taxpayers’ attitudes of government. Further analysis indicated that if taxpayers feel justice and have a positive attitude towards the government, it will lead to the highest intention to comply.
Research limitations – The relationship between the justice variable on tax amnesty and the intention to comply is also possibly influenced by the existence of other variables such as feelings of disappointment. Therefore, in the future, it is necessary to do a study involving feelings of distress as a moderating variable in the relationship between justice and tax amnesty to comply.
Practical implications – The government should continue to improve the performance and taxation system in order to create a positive attitude among taxpayers so that they will eventually comply with their tax obligations.
Originality/Value – There are no previous studies that examined the interaction effect between the perceived justice of tax amnesty and taxpayer’s attitudes towards the government on intentions to comply.
Keyword : intention to comply, perceived justice on tax amnesty, taxpayer’s attitudes towards the government
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Alm, J., Jackson, B. R., & Mckee, M. (1992). Estimating the determinants of taxpayers compliance with experimental data. National Tax Journal, 45(1), 107–114.
Alm, J., & McKee, M. (2006). Audit certainty, audit productivity, and taxpayer compliance. National Tax Journal, 59(4), 801–816. https://doi.org/10.17310/ntj.2006.4.03
Baer, K., & Borgne, E. L. (2008). Tax amnesties: Theories, trends, and some alternatives (pp. 8–9). IMF Publication Services.
Brown, R. E., & Mazur, M. J. (2003). IRS’s comprehensive approach to compliance measurement. In National Tax Association Spring Symposium in May 2003. https://doi.org/10.17310/ntj.2003.3.15
Bloomquist, K. (2009). A comparative analysis of reporting compliance behavior in laboratory experiments and random tax audits. In Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association, 102, 113–122.
Choo, C. Y. L., Fonseca, M. A., & Myles, G. D. (2016). Do students behave like real taxpayers in the lab? Evidence from a real effort tax compliance experiment. Journal of Economic Behavior & Organization, 124, 102–114. https://doi.org/10.1016/j.jebo.2015.09.015
Damayanti, T. W., Sutrisno, T., Subekti, I., & Baridwan, Z. (2015). The role of taxpayer’s attitude of the government and society to improve tax compliance. Accounting and Finance Research, 4(1), 180–187. https://doi.org/10.5430/afr.v4n1p180
Edlund, J. (1999). Attitudes towards tax reform and progressive taxation: Sweden 1991-96. Acta Sociologica, 42(4). https://doi.org/10.1177/000169939904200404
Engida, T. G., & Baisa, G. A. (2014). Factor influencing taxpayers’ compliance with the tax system: an empirical study in Mekelle City, Ethiopia. eJournal of Tax Research, 12(2), 433–452.
Feld, L. P., & Frey, B. S. (2007). Tax compliance as the result of a psychological tax contract: The role of incentives and responsive regulation. Law & Policy, 29(1), 102–120. https://doi.org/10.1111/j.1467-9930.2007.00248.x
Gerger, G. C. (2012). Tax amnesties and tax compliance in Turkey. International Journal of Multidisciplinary Thought, 2(3), 107–113.
Güzela, S. A., Özerb, G., & Özcanc, M. (2019). The effect of the variables of tax justice attitude and trust in government on tax compliance: The case of Turkey. Journal of Behavioral and Experimental Economics, 78, 80–86. https://doi.org/10.1016/j.socec.2018.12.006
Hasseldine, D. J., & Bebbington, K. J. (1991). Blending economic deterrence and fiscal psychology models in the design of responses to tax evasion: The New Zealand experience. Journal of Economic Psychology, 12, 299–324. https://doi.org/10.1016/0167-4870(91)90018-O
James, S., & Alley, C. (2002). Tax compliance, self-assessment and tax administration. Journal in Finance and Management in Public Services, 2(2), 27–42.
Kogler, C., Batrancea, L., Nichita, A., Pantya, J., Belianina, A., & Kirchler, E. (2013). Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania, and Russia. Journal of Economic Psychology, 34, 169–180. https://doi.org/10.1016/j.joep.2012.09.010
Laborda, J. L., & Rodrigo, F. (2003). Tax amnesties and income tax compliance: The case of Spain. Fiscal Studies, 24(1), 73–96. https://doi.org/10.1111/j.1475-5890.2003.tb00077.x
Liu, X. (2014). Use tax compliance: The role of norms, audit probability, and sanction severity. Academy of Accounting and Financial Studies Journal, 18(1), 65–80.
Misu, N. B. (2011). A review of factors for tax compliance. Annals of the Dunarea de Jos University of Galati, 17(1), 69–76.
Nurwanah, A., Sutrisno, T., Rosidi, R., & Roekhudin, R. (2018). Determinants of tax compliance: Theory of planned behavior and stakeholder theory perspective. Problems and Perspectives in Management, 16(4), 395–407. https://doi.org/10.21511/ppm.16(4).2018.33
Palil, M. R., Hamid, M. A., & Hanafiah, M. H. (2013). Taxpayers compliance behaviour: Economic factors approach. Jurnal Pengurusan, 38, 75–85. https://doi.org/10.17576/pengurusan-2013-38-07
Perumal, K. A. (2008). Tax fairness dimensions and tax compliance in an Asian context: The Malaysian perspective. International Review of Business Research Papers, 4(5), 11–19.
Razak, A. A., & Adafula, C. J. (2013). Evaluating taxpayers’ attitude and its influence on tax compliance decisions in Tamale, Ghana. Journal of Accounting and Taxation, 5(3), 48–57. https://doi.org/10.5897/JAT2013.0120
Rechberger, S., Hartner, M., Kirchler, E., & Hammerle, F. K. (2010). Tax amnesties, justice attitude, and filing behavior: A simulation study. Law & Policy, 32(2), 214–225. https://doi.org/10.1111/j.1467-9930.2009.00316.x
Richardson, G. (2008). The relationship between culture and tax evasion across countries: Additional evidence and extensions. Journal of International Accounting, Auditing and Taxation, 17(2), 67–78.
Rousseau, D. M., & Parks, M. J. (1993). The contracts of individuals and organizations. Research in Organizational Behavior, 15, 1–43.
Saad, N. (2009). Fairness attitudes and compliance behaviour: The case of salaried taxpayers in Malaysia after implementation of the self-assessment system. eJournal of Tax Research, 8(1), 32–63.
Said, L. (2018). Implementation of tax amnesty and its impact on Indonesia economics. Reports on Economics and Finance, 4(1), 45–56. https://doi.org/10.12988/ref.2018.815
Salman, K. R., & Sarjono, B. (2013). Intention and behaviour of tax payment compliance by the individual tax payers listed in Pratama tax office West Sidoarjo Regency. Journal Economics, Business and Accountancy Ventura, 16(2), 309–324. https://doi.org/10.14414/jebav.v16i2.188
Sanders, L. D., Reckers, P. M. J., & Iyer, G. S. (2008). Influence of accountability and penalty awareness on tax compliance. American Accounting Association, 30(2), 1–20. https://doi.org/10.2308/jata.2008.30.2.1
Saracoglu, O. F., & Caskurlu, E. (2011). Tax amnesty with effects and effecting aspect: Tax compliance, tax audits and enforcement around: The Turkish case. International Journal of Business and Social Science, 7(2), 95–103.
Sari, R. I., & Nuswantara, D. A. (2017). The influence of tax amnesty benefit attitude to taxpayer compliance. Jurnal Dinamika Akuntansi, 9(2), 176–183. https://doi.org/10.15294/jda.v9i2.11991
Saunders, M. N. K., Lewis, P., & Thornhill, A. (2016). Research methods for business students (8th ed.). Pearson Education Limited, England.
Schmolders, G. (1959). Survey research in public finance: A behavioral approach to fiscal theory. Public Finance, 25(2), 300–306.
Sudiartana, M., & Mendra, N. P. Y. (2018). Taxpayer compliance in SMEs sector: A theory of planned behavior. Jurnal Keuangan dan Perbankan, 22(2), 219–230. https://doi.org/10.26905/jkdp.v22i2.1561
Turner, J. C. (2005). Explaining the nature of power: A three-process theory. European Journal of Social Psychology, 35(1), 1–22. https://doi.org/10.1002/ejsp.244
Wenzel, M. (2003). Tax compliance and the psychology of justice: Mapping the field. In V. Braitwaite (Ed.), Taxing Democracy: Understanding tax avoidance and tax evasion (pp. 41–69). Ashgate.