Abstract
Social media platforms have been an important source for the dissemination of information, especially during the COVID-19 social restrictions (work from home) mandate. As a result, most companies now rely more on social media influencers to deliver their brand values. However, many of these influencers do not report and pay their income tax from their social media paid activities. This study is the first to understand the reasons behind their tendency behavior to comply and or incompliance income tax in Indonesia during the COVID-19 pandemic. A qualitative method with in-depth interviews, observation, and documentation was used as the method of study. A total of thirteen Indonesian millennials influencers with a minimum number of 10,000 followers and taxable income from social media were involved in the study to share their views about their tax compliances behavior. Our findings revealed that there are indices that affect tax incompliant behavior among millennial social media influencers such as the sufficiency of knowledge about tax, unclear tax imposition and categorization mechanism, the level of trust, nationalism, and administrative needs for works. These finding also implies that there is an urge to educate influencers about tax compliance by using more suitable content and media to maximize the potential tax revenue from this booming profession.
Highlights
The income tax compliance of social media influencers during COVID-19 pandemic: An exploratory study by Yeney Widya Prihatiningtias, Gracyella Natalie Putri Karo Karo Introduction
A detailed study was held by Radvan (2021) who argues that rather than create narration about how to increase the compliance of the influencers, the tax authorities should learn the finest way to impose a tax on influencers by focusing on the content of the relationship generating influencers' income so that the government may able to calculate the best amount of tax should be paid
This study finds out some reasons regarding influencer's tax compliance which are sufficient knowledge about tax, a high level of nationalism, and the emergence needs related to tax, such as for administrative requirements for work
Summary
The income tax compliance of social media influencers during COVID-19 pandemic: An exploratory study by Yeney Widya Prihatiningtias, Gracyella Natalie Putri Karo Karo Introduction. The government around the world has tried to minimize the gap between the expected amount of tax received and the real tax income by understanding the drivers of tax compliance and the most effective way to minimize the cost of doing so (De Neve et al, 2021) This has been a challenging effort, especially during the COVID-19 pandemic. Based on the government revenue and expenses budget, income from the tax sector has experienced a significant decline of -9.2% in 2020 compared to previous years which always increased This may be due to the hardships faced by industries during the pandemic for the last two years so that their ability to pay tax has decreased. A detailed study was held by Radvan (2021) who argues that rather than create narration about how to increase the compliance of the influencers, the tax authorities should learn the finest way to impose a tax on influencers by focusing on the content of the relationship generating influencers' income so that the government may able to calculate the best amount of tax should be paid. Groulx & McGregor (2018) and Sekeroglu & Bilgin (2019) do the same thing in seeing a design to integrate social media data into the tax analytics process to detect tax evasion by influencers and promote tax enforcement activities, and to provide tax regulations in such a way to fit the government needs with the ability of influencers to pay tax
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