Taxpayer Behavior Research Articles

The Impact of Tax Audit Intensity and Probability of Fraud Detection on Tax Evasion: The Moderating Role of Tax Officials' Service

This study investigates the relationships between tax audit intensity, the probability of fraud detection, and tax evasion while examining the moderating role of tax officials' service. The research reveals that tax audit intensity significantly reduces tax evasion, confirming its effectiveness as a deterrent. However, the hypothesis regarding the probability of fraud detection's impact on tax evasion was rejected, indicating that the likelihood of detection does not directly influence taxpayer behavior in this context. Additionally, the study found no significant moderating effect of tax officials' service on the relationship between tax audit intensity, fraud detection probability, and tax evasion. These findings suggest that while audit intensity is crucial for enhancing compliance, the quality of service provided by tax officials does not substantially alter taxpayer responses to enforcement measures. The results underscore the need for tax authorities to prioritize strengthening audit processes and detection mechanisms while recognizing that service quality, though important for building long-term trust, may not significantly influence immediate compliance behavior. Future research should explore other moderating factors that could impact taxpayer decisions in varying economic and cultural contexts.

Review of Factors Affecting Tax Compliance And Tax Ratio Target Achievement

This article provides a comprehensive review of the factors influencing tax compliance and the achievement of targeted tax ratios, employing literature review and qualitative analysis approaches. The primary objective is to identify and analyze the determinants that affect taxpayers' compliance behavior and how these factors contribute to meeting the desired tax ratio targets set by governments. Tax compliance is crucial for ensuring sufficient public revenue, which supports economic development and public services. Achieving targeted tax ratios is essential for maintaining fiscal stability and promoting equitable economic growth. The study explores various factors, including economic, psychological, and institutional elements, that impact tax compliance. Economic factors such as income levels, tax rates, and perceived fairness of the tax system are examined alongside psychological factors such as taxpayer attitudes, trust in government, and perceived benefits of public spending. Institutional factors, including the efficiency of tax administration and the legal framework, are also considered. By synthesizing findings from existing literature, this article highlights the complex interplay of these factors and suggests strategies for policymakers to enhance tax compliance and achieve targeted tax ratios. The findings underscore the importance of a multifaceted approach that considers both taxpayer behavior and systemic reforms to improve tax systems' effectiveness.

TAX AVOIDANCE: AN AGENCY THEORY PERSPECTIVE

Tax Avoidance, or often known as tax avoidance, is an obstacle that has the potential to affect state cash revenue. This arises from the irresponsible behavior of corporate taxpayers who do not fulfill their obligations in paying their taxes, in practice often taking advantage of weaknesses or loopholes in tax regulations. The purpose of this research is to test the impact of transfer pricing, sales growth, capital intensity, and debt to equity ratio on tax avoidance in the oil, gas and coal mining industry listed on the IDX in 2019 – 2022. The method used in sampling is the purposive sampling method through a sample that has a total of 8 out of 19 oil, gas and coal mining industries in the IDX in 2019 – 2022. The variables used in this research are dependent (y) and independent (x) variables. The data analysis used in this research is multiple linear regression using the SPSS version 18 test tool. Based on the results of the analysis carried out, the researchers were able to draw conclusions that the variables transfer pricing, sales growth, capital intensity, and debt to equity ratio had a significant positive effect on tax avoidance, on the significance value of each independent variable (x), namely 0.001, 0.003, 0.042, and 0.010 where the value was smaller than 0.05.

Social Norms, Perceptions, Taxpayer Behavior, Tax Digitalization and Taxpayer Compliance

Considering that the level of tax compliance is important for the country as outlined above, research is needed that can provide solutions to reducing and even eliminating the gap between the ideal conditions of taxpayer compliance and the reality on the ground. This study uses a quantitative research design. The quantitative instrument used was in the form of a questionnaire distributed to prospective respondents. The data was analyzed using SmartPLS software with SEM (Structural Equation Modelling) analysis techniques. This study uses purposive sampling in the determination of samples. Typical case sampling is used in this study, namely, prospective respondents are taxpayers who come directly to the tax office to report their tax returns even though at the time of reporting their tax returns at the tax office, they still use digital tax services such as e-filling or e-form. The results of this study show that three of the four research variables used have a significant effect on taxpayer compliance. For future researchers, there is still a lot of room to continue research that explores other factors that affect the relationship between attitudes to behaviour, social norms and perception of behavioural control towards taxpayer compliance in the hope that the results can be used in efforts to improve tax compliance.

The Effect of Social Norms on Value Added Tax Compliance among Small and Medium Enterprises in Embu Town

Despite the increasing need to raise the level of revenue collection, Kenya still faces the challenges of low tax compliance. The broad objective of the study was to determine the effect of social norms on value tax compliance among small and medium enterprises in Embu town, Kenya. The study was guided by social influence theory. The study adopted an explanatory research design and targeted a population was 1050 small and medium enterprises in Embu town. A sample size of 290 was drawn from this population and the response rate was 74%. Primary data collection was employed using closed structured questionnaires from study's objective. The data was analyzed using descriptive, inferential statistics and multiple linear regression analysis. A correlation analysis conducted before testing for coefficients shows that there was a positive and significant linear relationship between social norms and value tax compliance r=0.696. The coefficient table indicates that social norms have a positive effect on VAT compliance β= 0.138 (p=0.006<0.05). Based on the findings the study recommends that Kenya Revenue Authority integrate insights from behavioral economics into tax compliance theories. Explore how psychological factors such as social norms can be incorporated into models predicting taxpayer behavior. Further research may be conducted to investigate the effect of technology on VAT compliance.

Exploring the relationship between taxpayers and tax authorities in the digital era: evidence on tax compliance behavior in emerging economies

Purpose This study aims to understand the determinants of the relationship between tax authorities and taxpayers in the digital era and how this relationship impacts tax compliance behavior, especially in the context of emerging countries like Morocco. Design/methodology/approach A qualitative methodology was adopted, involving interviews with tax inspectors and auditors, certified accountants’ experts and tax consultants. Data analysis was conducted using IRAMUTEQ software. Findings The research highlights that the relationship's quality and the level of mutual trust between tax authorities and taxpayers are critical in determining tax compliance in the digital era. Central factors affecting this relationship encompass effective communication, simplification of tax procedures, clarity of tax laws and the digitization of tax services. Furthermore, the study emphasizes that these dynamics and determinants significantly influence the tax compliance behavior of taxpayers in Morocco, revealing intricate connections between relational aspects and compliance attitudes. Practical implications The findings suggest that fostering a mutually trusting relationship, through improved communication, simplification and digitization, can enhance taxpayer compliance. This is valuable for policymakers and tax authorities developing strategies to improve tax systems in emerging countries. Originality/value This study contributes to the sparse literature on the relationship between tax authorities and taxpayers in the and digital era, offering new insights into factors that influence tax compliance in the post COVID-19 crisis context. Its practical recommendations provide a foundation for developing strategies aimed at improving this relationship and, consequently, taxpayer compliance behavior in emerging countries.

Investigating the compliance behavior of GST taxpayers: An extension to theory of planned behavior

The government around the globe are striving to improve their public finance to meet their public expenditures and for sustainable development of their economies. However, the capability of the governments to generate adequate revenue is limited and refrained by numerous factors. The non‐compliance behavior of GST taxpayers is one of the major factors attributed to this phenomenon. Therefore, this paper endeavors to frame and validate a comprehensive instrumental scale with the application of the extended Theory of Planned Behavior (TPB) for analyzing the determinants of compliance behavior of GST taxpayers in India. The current study has adopted the quantitative design through exploratory and confirmatory studies by incorporating qualitative semi‐structured interviews with 100 GST consultants to validate the instrumental scale. The study has collected a random sample of 339 GST taxpayers using snowball random sampling. Meanwhile, the study has employed the Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) for analyzing the collected data. The result affirms six major factors in determining the compliance behavior of GST taxpayers explaining 65.166% of the total variance. The findings have instituted perceived complexity, trust and moral obligation in addition to three major constructs of TPB theory namely attitude behavior, subjective norms and perceived behavioral control of the GST taxpayers. The results explicate that the compliance behavior of GST taxpayers is a dynamic and multifaceted phenomenon and it is critical for GST authorities to comprehend the compliance behavior of GST taxpayers. The result explicates that there is a need to simplify and rationalize the GST system in India to increase voluntary compliance of taxpayers. The results also endorse for building trust between GST taxpayers, GST authorities and the state. This study may act as a baseline for formulating policies and strategies on GST in India. There is hardly any national and international study that has applied the extended theory of planned behavior for studying the antecedents of compliance behavior of GST taxpayers.

Pemahaman E-Filling, Peran Pelayanan Account Representative dan Kualitas Teknologi Informasi terhadap Kepatuhan Wajib Pajak UMKM Kota Semarang

Taxpayer compliance is a behaviour of taxpayers in fulfilling their tax responsibilities in accordance with applicable tax laws and regulations. This study aims to analyse the effect of the comprehension of e-filing, role of account representatives services, and the quality of information technology on taxpayer compliance. The population in this study uses small and medium enterprise taxpayers in the Semarang City. The sampling method used in this study was carried out through simple random sampling, with a total sample of 100 respondents. Data collection was carried out through distributing questionnaires. The data analysis method used is a quantitative descriptive research method with processing data quality tests, classical assumption tests, hypothesis testing, and multiple linear regression analysis tests. The results of this study indicate that the understanding of e-filing, the service role of account representatives, and the quality of information technology have a positive and significant effect on taxpayer compliance. Keywords: Comprehension Of E-Filing, Role Of Account Representative Services, Taxpayer Compliance, Quality Of Information Technology

Tax amendments in times of crises in Poland and Czech Republic – selected legal aspects

This publication is a fragment of research within the framework of broadly understood comparative tax law. The aim of this publication is to show the response of both the Polish and Czech legislators to the economic crises causedby the COVID-19 pandemic and the war in Ukraine. The methodology used in the article is related to the comparative legal method, the historical-descriptive method and the dogmatic method. The methodology in the article is chosen to show if the described different legal solutions may constitute an interesting reference to other EU countries as an example of the possible response to thefuture economic crisis. The purpose of this publication is also to indicate whether the analyzed countries decided to increase or reduce the tax burden and what the effectiveness of the selected legislative actions. In the conclusions, the authors indicate, among others that the COVID-19 pandemic and the war in Ukraine were for many countries a justification for changes in tax law, but the effectiveness of these actions remains at least questionable. Therefore, from the point of view of fiscal stability, in times of economic crises, appropriate solutions should always refer to the principle of legal certainty and long-termeconomic analysis of the effectiveness of a given amendment. This publication is, therefore, an incentive to reflect on the state of new regulations and conceptsof tax law implemented in response to the economic crisis and constitute an element of a broader discussion on the impact of tax regulations on the behaviour of taxpayers and the state budget.

An Extensive Examination of Taxation as an Accelerator for Economic Growth in Nigeria

This study looks at how taxes affect Nigeria's economic development. A time series dataset from 1996 to 2021 was estimated using a short run Autoregressive Distributed Lag [ARDL(2,1,0,0,0)]. The dataset was collected from FIRS. The impacts of Value Added Tax (VAT), Company Income Tax (CIT), Personal Income Tax (PIT), and Petroleum Profit Tax (PPT) on Nigeria's Gross Domestic Product were particularly examined in this study. The findings showed that while personal income tax and value added tax have a short-term negative impact on economic growth, corporation income had a considerable beneficial impact on Nigeria's economic expansion. In addition, petroleum profit tax has positive but insignificant effect on economic growth in the long run. Therefore, striking the right balance between tax rates, economic incentives and compliance is crucial. The Laffer curve theory provides valuable insights into finding the optimal tax rate that maximizes revenue. This can be done balancing the incentives for economic activity against the burden of taxation, finding the optimal rate varies depending on various economic factors and the taxpayer behaviour. The study suggests that offering targeted tax incentive for investments, innovation, and entrepreneurship. These incentives can include tax breaks for specific sectors, research and development activities, and job creation initiatives.

Transfer Pricing in the Post-BEPS Era: the BEPS Package, as a Tool in Helping Tax Authorities Prevent Aggressive Tax Optimization in a Specific Sector. Case Study: the IT Industry in Romania

Abstract The debate regarding the willingness of enterprises to use transfer pricing for tax optimization is one with significant history (the first OECD report on transfer pricing dates from 1979). In the last fifteen years, this topic gained great traction as globalization became a key word in all economic undertakings. In 2013 the OECD/G20 officially launched the BEPS project, aimed at identifying and closing any loopholes present in the taxation system used by companies to optimize their tax burden. The work was finalized in 2015 by issuing the BEPS Package. However, the fight against base erosion and profit shifting did not end, as the OECD/G20 periodically monitors how the measures are implemented. Considering the importance of the IT sector in Romania, it is significant to investigate if the BEPS Package is an efficient tool in helping Romanian tax authorities prevent aggressive tax optimization in this industry. To provide a tentative answer, a statistical analysis was performed, aimed at comparing the profitability of related and non-related Romanian IT companies. Although the BEPS Package is not the only factor influencing the behavior of taxpayers, the work of OECD/G20 is one of the main forces shaping the Romanian taxation environment. Following the analysis, no significant differences were identified between the profitability of related and non-related companies, leading to the conclusion that local taxpayers are not inclined to engage in aggressive tax optimization, which is also a consequence of the way in which the legislation was drafted, influenced by the BEPS Package.

Beyond the Myths: Misinformation and Its Effect on Taxpayer Behaviour

The study investigates the impact of misinformation on taxpayers' tax compliance behaviour, aiming to uncover the psychological and economic repercussions on citizens. Employing a qualitative research methodology, the study conducted interviews with eight participants, followed by a thematic analysis to identify prevailing themes in taxpayer responses to misinformation. The findings reveal that misinformation significantly influences taxpayer behaviour, leading to stress, mistrust of tax authorities, and subsequent non-compliance. Analysis of the interview data highlighted the role of digital platforms in spreading misinformation, the susceptibility of newer businesses and younger taxpayers, and the erosion of trust and tax morale as critical factors affecting compliance behaviour. The study underlines the broader implications of misinformation on the tax system's integrity and the fiscal relationship between taxpayers and authorities, calling for strategies to enhance information dissemination and taxpayer education to bolster compliance and trust.

Psychological Social Behavior: Taxable Entrepreneurs Respond to Vat Policy Changes

Environmental considerations or individual intentions influence taxpayer behavior. VAT changes may be a reaction to behavior either overtly or covertly. This research applies an approach approach with the method of interviews conducted with business actors. However, VAT can reduce profits by influencing consumers to spend resources and look for lower prices. Regarding the VAT rate, it is still considered unfair. Furthermore, double recording or splitting the business into several forms is implemented, which is passed on to other family members. Another option is to do tax planning to meet the tax burden. Decisions in the information action model can be based on rationality, routine behavior, nature/tradition and subjective norms / perceptual behavior. Findings from an environmental perspective are formed from the level of experience and age, as well as the encouragement of social communities and provide psychological stimuli for taxpayer behavior in assessing changes in tax regulations, especially about VAT rates.

Constructing a Supplier-Buyer Network: Imported Goods Flow Tracking in the Tax Transaction Records in Armenia

Taxpayer networks are among main topics of research given the evolving applicability of modern technological solutions and raising importance for tax authorities to reveal hidden relationships or patterns in the taxpayer behavior. In this study, taxpayer networks are visualized and analyzed with the application of network analysis techniques and a generalizable methodology for product traceability over the supply chain is suggested. In essence, taxpayer networks depict the web of connections among taxpayers, highlighting the flow of goods, services, and financial transactions between them. Previous studies address the issue of product classification from transactional tax documents. Modern NLP techniques were applied for product categorization given only product description in Armenian language and with limited information. The developed algorithm was used as a starting point to identify which taxpayers were involved in the trade of a specific good and thus for network construction. A set of products was chosen for construction of the taxpayer network forming the supply chain from importers to final consumers. Adjusted by a markup, the amount of rice imported to Armenia was found and identified in the last nodes of the supply chain sold to final consumer and documented in tax receipts. Factors like local production are also considered during the analysis and solutions are suggested including price filters on the products subject to trade to filter out local production.

The Influence of Taxation Knowledge, Taxpayer Awareness, and Tax Sanctions on Individual Taxpayer Compliance (At the Bandung Cicadas Primary Tax Office)

This research uses data from KPP Pratama Bandung Cicadas to highlight concerns about taxpayer compliance, especially with regard to self-assessed taxes. When it comes to tax knowledge, awareness, penalties and compliance, researchers have different opinions. The results highlight the influence of understanding, awareness, and impact on taxpayer behaviour as well as the collection of government taxes. An analysis of the relationship between taxpayer compliance and tax knowledge, awareness, and penalties is carried out through the use of descriptive and verification techniques in a quantitative research. Taxpayers of KPP Pratama Bandung Cicadas will be surveyed to determine the extent to which tax knowledge, awareness, and penalties influence compliance. This is done without comparing or linking the factors. Slovin was used to extract 100 taxpayers from a total of 300,740. We use quantitative and descriptive statistics. Tax compliance and tax policy should be improved as a result of this study. According to the research, people who are more aware of the tax rules are better able to pay their taxes. Enforcing tax rules through the use of tax penalties increases taxpayer understanding. According to the results of the research, the increase in taxpayer compliance at the Bandung Cicadas Primary Tax Service Office can be attributed to increased tax knowledge, awareness, and penalties. Given that these three factors statistically influence taxpayer compliance, it is important to study them together. Tax education, taxpayer awareness, and the effectiveness of tax penalties are some of the recommendations made in the study to increase taxpayer compliance.

Direct Tax Reforms of India: History and Evolution

In the Indian context, this study looks at a number of aspects of revenue mobilisation, taxpayer behaviour, and tax administration. The study finds important patterns and connections in the dynamics of tax collecting by applying quantitative analytical techniques such a regression analysis, ratio analysis, CAGR (compound annual growth rate) analysis, and correlation analysis. The results of regression analysis highlight the impact of the economy on tax collection, showing a robust positive connection between GDP and direct tax revenue. Throughout a 22-year period, ratio analysis shows rising efficiency patterns in tax collecting processes, while CAGR analysis shows a steady increase in the taxpayer base, especially among small- and medium-sized firms and individual taxpayers. Moreover, an examination of the Tax Effort Ratio suggests that direct taxes are making a larger contribution to overall tax revenue, which is indicative of changes in the composition of income. Positive correlations between various direct tax types and overall tax revenue are revealed by correlation analysis, highlighting the interdependence of tax collecting dynamics. The study admits its limitations, which could affect the finding’s generalisation and interpret. These limitations include data limits, methodological difficulties, and contextual issues. However, the knowledge gained has significant implications for additional study areas, decision-making by managers, and policy formation with regards to improving the efficiency of tax administration, encouraging compliance with taxes, and supporting sustainable financial governance in India. In order to tackle these issues and develop proven methods for enhancing the results of tax administration and fostering equitable economic growth, interdisciplinary cooperation, involvement of stakeholders, and continuous surveillance and evaluation are advised. Keywords: Tax, Regression, CAGR, Tax Effort Ratio, Correlation, Ratio, Revenue, Income.

Tax Compliance Actions by Tax Authorities and Voluntary Compliance with Tax Obligations by Individual Taxpayers

Research objective: Tax compliance actions aim to improve the relationship between the tax authorities and taxpayers, increasing voluntary compliance with tax obligations and reducing administrative and judicial litigation. In this sense, the defined objective was to analyze whether tax compliance actions increase voluntary compliance with tax obligations. Methodology: Thus, a quantitative approach was used, through analysis of latent classes, carried out on the baseed on longitudinal data from the Federal Revenue, with 531 individual taxpayers, related to compliance action. Results: After the action, it was found that the taxes owed had a statistically significant increase and the tax gap was increasingly reduced between 2015 and 2018, indicating that the implemented tax compliance actions were effective in promoting voluntary compliance with tax obligations by taxpayers. In addition, the action also presented advantages to taxpayers, since, when there is a spontaneous regularization, there is less possibility of facing a tax procedure, as well as a reduction in administrative costs and the amount of litigation. Practical and theoretical contributions: The practical contributions are aimed at enhancing future tax compliance initiatives carried out by Federated Entities. Furthermore, the theoretical contribution utilizes the Slippery Slope Model, which illustrates an upsurge in voluntary compliance with tax obligations following a compliance action, attributed to heightened authority and confidence in the tax regulatory body. As a result, this theoretical contribution underscores the significance of the Slippery Slope Model in comprehending taxpayer behavior and in devising more efficient tax compliance strategies.

Pengaruh Kepatuhan, Kecenderungan Negosiasi, Moral Pajak dan Manajemen Laba terhadap Voluntary Tax Compliance di Mediasi Persepsi Kebijakan Fiskal

The purpose of this study was to analyze how the influence of taxpayer compliance, negotiation tendencies, tax morale and earnings management on valuntary tax compliance. and how the influence of taxpayer compliance, negotiation tendencies, tax morale and earnings management on valuntary tax compliance is mediated by fiscal policy. The study population is a taxpayer of Small and Medium Enterprises domiciled in in Kenjeran, East Java, the study sample involved 60 respondents using a purposive sampling method, the questionnaire as an instrument and processed using SEM Warp PLS 6.0 approach. The results showed that taxpayer compliance, the desire to negotiate, earnings management has a positive impact on valuntary tax compliance, but moral tax has a negative impact on valuntary tax compliance, taxpayer compliance, the desire to negotiate earnings management in fiscal policy mediation has a positive impact on valuntary tax compliance while tax morale in the mediation of fiscal policy has a negative impact on valuntary tax compliance. The novelty was found that taxpayers are obedient in carrying out their tax obligations influenced by the behavior of taxpayers, not because of regulations, behavior seen from economic, financial conditions by using a fiscal policy approach and conceptual approach based on a developing view of the tax policy.

ФІСКАЛЬНО-ПСИХОЛОГІЧНІ ЧИННИКИ УХИЛЯННЯ ВІД ОПОДАТКУВАННЯ

The article is devoted to the study of behavioural factors that influence the decision-making of business entities and the population regarding tax evasion. The problem of tax evasion from the point of view of the influence of psychological characteristics of the individual and external economic factors on the deviant behaviour of taxpayers is considered. The influence of these factors on the volume of the shadow economy in the country is proven.The research allowed us to outline the main models that explain the reasons and motivations of taxpayers when they decide to violate tax legislation. It is emphasized that tax offences as a component of the shadow economy are present in many countries of the world. It is noted that the volume of violations increases with the onset of destructive events in the economy, such as economic and social crises and war. It is stressed that a significant role in the presence of deviant behaviour of taxpayers is played by their financial and legislative ignorance. The main elements of taxes that pose the greatest risks of tax evasion are identified.It has been found that the level of corruption in the country and the insufficient severity of possible punishment for tax crimes play a significant role in the decision of economic entities to evade taxation. An analysis of the corruption perception index in some countries has been made. It is proved that in less corrupt countries, tax collection is higher than in countries with high levels of corruption. It is emphasized that the lack of proper control by tax authorities leads to a larger scale of tax evasion, so it is necessary to conduct all legally established types of tax audits, despite the martial law in the country.

Digital taxation, artificial intelligence and Tax Administration 3.0: improving tax compliance behavior – a systematic literature review using textometry (2016–2023)

PurposeThis paper aims to analyze the impact of tax digitalization, focusing on artificial intelligence (AI), machine learning and blockchain technologies, on enhancing tax compliance behavior in various contexts. It seeks to understand how these emerging digital tools influence taxpayer behaviors and compliance levels and to assess their effectiveness in reducing tax evasion and avoidance practices.Design/methodology/approachUsing a systematic review technique with the Preferred Reporting Items for Systematic Reviews and Meta-Analyses method, this study evaluates 62 papers collected from the Scopus database. The papers were analyzed through textometry of titles, abstracts and keywords to identify prevailing trends and insights.FindingsThe review reveals that digitalization, particularly through AI and blockchain, significantly enhances tax compliance and operational efficiency. However, challenges persist, especially in emerging economies, regarding the adoption and integration of these technologies in tax systems. The findings indicate a global trend toward digital Tax Administration 3.0, emphasizing the importance of regulatory frameworks, capacity building and simplification for small and medium enterprises (SMEs).Practical implicationsThe findings provide guidance for policymakers and tax administrations, underscoring the necessity of strategic planning, regulatory backing and global cooperation to effectively use digital technologies in tax compliance. Emphasizing the need for tailored support for SMEs, the study also calls for expanded research in less represented areas and specific sectors, such as SMEs and developing economies, to deepen global insights into digital tax compliance.Originality/valueThis study has attempted to fill the gap in the literature on the comprehensive impact of fiscal digitalization, particularly AI-based, on tax compliance across different global contexts, adding to the discourse on digital taxation.