Abstract
The purpose of this article is to examine the effect of perceptions of justice in tax amnesties on post-amnesty tax compliance. The independent variables employed were distributive justice, procedural justice, and retributive justice, and the dependent variable is tax compliance. Measurement of the variables was based on five Likert scales, from (1) Strongly Disagree to (5) Strongly Agree. The results of the multiple regression analysis of 133 questionnaire answers indicate that tax amnesty justice has a significant positive effect on post-amnesty tax compliance. The variables of tax justice that have a positive effect on tax compliance are procedural and retributive justice, with regression coefficients of 0.248 and 0.237 respectively, at a significance level of 0.00. A fairer tax amnesty policy will improve tax compliance after the amnesty period. The tax authorities need to make improvements to create a more equitable tax amnesty policy in the future.
Highlights
Tax amnesty is one of the interesting research topics in the taxation field
The previous testing of regression model 1 showed that justice influences tax compliance, while the results of testing regression model 2 show that the procedural justice and retributive justice variables affect it
Taxpayers feel that the rates and benefits of tax amnesty, which are indicators of distributive justice, do not affect the level of tax compliance after a tax amnesty
Summary
The amnesty program is a strategic policy to overcome the problem of state revenue. There have been three reasons for governments to implement tax amnesty programs, namely (1) to increase revenue quickly, (2) to increase tax compliance in the future, and (3) to encourage repatriation (Baer & Le Borgne, 2008). The Indonesian government introduced a tax amnesty policy through Law No 11 of 2016, with the goal is to attract funds from abroad and increase tax revenue through tax penalties. Research on the behavior of income tax evaders utilizing tax amnesty programs in California showed that higher marginal tax rates increase tax avoidance activities (Crane & Nourzad, 1990). López Laborda and Rodrigo (2003) obtained a different result, namely that amnesty in Spanish did not affect tax revenues in the short or long term
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