Compliant Taxpayers Research Articles

Analisis Tingkat Kepatuhan Wajib Pajak Hotel di Kecamatan Rantepao

This research aims to analyze the level of hotel tax compliance in Rantepao District. This research aims to analyze the level of hotel tax compliance in Rantepao District. The research method used is a quantitative method with a sample of 4 hotels with the results of this research. This research shows that the level of hotel tax compliance in Rantepao District varies, with the majority of hotels showing good compliance, 75% of the hotels sampled in this research are categorized as compliant taxpayers because they fulfill their tax obligations well, demonstrate conformity of reporting, timeliness of payments, and completeness of dokuments in accordance with regulations and 25% are categorized as non-compliant taxpayers possibly due to a lack of understanding of the importance of tax comlpiance.

Coming clean on your taxes

This paper develops a simple model to explore whether a higher detection probability of tax evaders—e.g., because of improved exchange of information between countries and/or due to digitalization of tax administrations—renders it optimal for governments to introduce a voluntary disclosure program (VDP) and, if so, under what terms. We find that if the VDP is unanticipated, it is likely to be optimal for a revenue-maximizing government to introduce a VDP with relatively generous terms, i.e., a low or even negative penalty. When anticipated, however, the VDP is neither incentive compatible nor optimal, as it induces otherwise compliant taxpayers to evade tax. A VDP can then only be beneficial if tax evasion induces an external social cost beyond the direct revenue foregone, e.g., due to adverse effects on overall tax morale. In contrast to the common view that VDPs should come along with additional enforcement effort, we find that governments should relax enforcement if the VDP itself provides more powerful incentives to come clean.

Analisis Pengaruh Organizational Capital terhadap Tingkat Penghindaran Pajak Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia

This study aims to analyze the effect of organizational capital on corporate tax avoidance. The population of this study are mining companies listed on the Indonesia Stock Exchange in the 2012-2021 periods. Using panel data regression with the common effect model, the results of the study found that organizational capital has a negative and significant effect on corporate tax payments. In other words, high organizational capital can increase corporate tax avoidance. Companies that are able to manage organizational capital properly will be able to create organizational efficiency, one of which is through tax management that the company will choose. This study confirms previous findings that organizational capital creates organizational innovation and organizational learning abilities in related to tax avoidance. This study also strengthens the previous findings that companies with high organizational capital have a greater chance of tax avoidance. The research has implications for the company's internal policy as a taxpayer to increase its organizational capital so that it can have an effective management. On the other hand, the tax authorities can make policies that support the creation of compliant taxpayers and ethical corporate tax management.

Training for Preparing, Filling and Reporting of Tax Return at WITA Jakarta

MSMEs (Micro, Small and Medium Enterprises) in Indonesia are growing rapidly from year to year and are a group that strongly supports the development of the Indonesian economy as a whole. Even so, the compliance of MSMEs as Non-Employee Individual Taxpayers is quite low, this is due to the limited human resources owned by MSME actors in understanding tax regulations and carrying out tax obligations including in the preparation of Annual Tax Return reporting and reporting. Due to these limitations, this Community Service project is carried out to raise WITA Jakarta MSMEs' tax literacy, especially in the preparation of the Annual Tax Return and its reporting so that it can help MSMEs as compliant taxpayers and assist the state in disseminating information on tax regulations to increase tax revenue

Tax on income obtained from cryptocurrency transactions

The following research is aimed at individuals tangentially involved with digital or virtual currencies, who are increasingly facing questions about how to declare income derived from trading these financial instruments. The purpose of the research is to present the tax treatment of transactions with cryptocurrencies in the part related to the taxation of the income of legal entities and individuals obtained from the activity of trading with virtual currencies according to the legislation of the Republic of Moldova, as well as the practice followed in other countries. The issue of taxation of these types of income is a current one both at the level of the legislation of the Republic of Moldova and at an international level, given the fact of abundant flooding of the world economy with an enormously large number of cryptocurrencies without which today the financial-banking system would look like a quaint one. It is worth mentioning that the clarity of the tax legislation regarding the taxation of new types of income, or the synchronous advancement of the tax legislation with the up-to-date needs of the taxpayers is a priority both for the institutions that collect the sources of the state budget, as well as the income payers. In other words, increasing the clarity of the tax legislation and the tendency to align with international standards and practices ensure greater efficiency in the successful administration of state revenues and an upward growth in the number of compliant taxpayers. At the same time, this research aims to examine the causal link between the harmonization of legislation to the needs of the market with the level of compliance of taxpayers and receipts to the state budget. The scientific methods used in the study are as follows: analysis of the legal framework governing the research, synthesis of information, comparison to identify distinctive features, deduction of challenges.

Shaming for Tax Enforcement

We investigate company reactions to the threat of reputational losses. To do so, we leverage the introduction of a naming-and-shaming policy for tax debt enforcement in Slovenia in 2012. The policy was announced four months before its implementation, which allows us to separate responses to the threat of shaming from the responses to actual shaming. Our extensive administrative tax data cover taxes owed and paid for the universe of taxpayers in Slovenia. Based on a quasi-experimental research design, we document that corporations significantly reduce their tax debt in response to the threat of shaming, particularly in industries in which reputational concerns are likely to be important. Self-employed individuals also reduce their tax debt but to a lesser extent. The publication of the first naming-and-shaming list further reduced tax debt among shamed taxpayers. However, the effect of actual shaming is marginal compared with that of the threat of shaming and reduces quickly. Previously compliant taxpayers remained compliant throughout. This paper was accepted by Yan Chen, decision analysis. Funding: This work was supported by Deutscher Akademischer Austauschdienst [Grant 91537728/211483], Deutsche Forschungsgemeinschaft [Grant DW 75/1-1], and Norges Forskningsråd [Grant 314479]. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2021.4295 .

Audits, audit effectiveness, and post-audit tax compliance

This study uses a laboratory experiment to investigate the effect of audit effectiveness, or the share of undeclared income that the tax agency detects in an audit, on post-audit tax compliance. We also study whether the effects of audits depend on a taxpayer's reporting behavior prior to the audit. Our findings show that tax audits have differential effects on post-audit compliance and that the effectiveness of audits determines these responses; that is, while effective audits increase post-audit tax compliance, ineffective audits have the opposite effect. We also find that relatively compliant taxpayers exhibit the strongest behavioral response to audits. Our results indicate that the specific deterrent effects of tax audits are more ambiguous than standard and behavioral models of tax compliance suggest, with these effects dependent on the effectiveness of audits and on the taxpayer's prior reporting behavior.

The Effectiveness of Tax Systems on Artisanal Miners and Small-Scale Miners

Purpose: This desktop study was conducted in order to analyze the tax systems of artisanal miners. It sought to analyze the management of the tax systems with the view of improving the system and ensure that all participants in this sector are included in the tax bracket. Design/Methodology/Approach: The study adopted a desktop research methodology. Data were collected from books, the internet and articles by scholars and other relevant sources. Findings: The results showed that paying taxes affect the artisanal miners negatively on their operations. It also emerged that the tax systems have failed to bring all the informal miners into the tax net. Hence there is a need to restructure the tax systems. Practical Implications: Information and strategies to help the ASM sector must be put in place to increase awareness and increase tax compliance among this sector participant. ZIMRA can improve the flow of information by taking advantage of social media platforms such as WhatsApp and Twitter to disseminate information. Fliers and advertising campaigns can be used to spread information. Originality/Value: It considers the fact that ZIMRA must provide incentives for compliant taxpayers as this will motivate them to continue being compliant and also push others to follow suit.

Effect of Social Media Education on Tax Compliance among Motor Vehicles Spares Traders in Suburb Area of Nakuru Town, Kenya

Tax compliance is the extent to which the tax payers strive to do as per the requirement by the relevant tax laws that have been set up by countries. Compliant tax payers are those that make timely declaration of their tax positions. In addition, compliance by taxpayers is dependent on economic incentives embedded in the tax structure. Compliance with tax payers also relies on the effectiveness of the tax structure and administration in detecting and punishing non-compliant taxpayers. The objective of the study was to assess the effect of social media education on tax compliance among motor vehicles spares traders in Suburb area of Nakuru town, Kenya. This study employed an explanatory research design. This study target population was 300 motor vehicles spare traders operating in the suburb area of Nakuru town. The sample size of the study was 150-motor vehicle spare traders operating in the Nakuru town suburb area. This study collected primary data using structured questionnaires. The study found that social media education is positively related to compliance to taxation. The study concluded that it is important and significant to include the element of taxpayer education by use of social media. The study recommends that the KRA needs to scale up its social media engagement of the enlightenment of taxpayers since the use of social media platforms is very convenient given the advent and advantages brought about by use of smartphone technology

Does Tax Knowledge Motivate Tax Compliance in Malaysia?

This study aims to clarify whether tax knowledge of individual taxpayers motivates tax compliance in Malaysia. Studies with similar topics express the fact that there still exists a gap in profiling the demographic characteristics of knowledgeable taxpayers and better compliant taxpayers in Malaysia. Age, gender, income groups, and education level were the demographic variables used to study the association. The study applied a survey method for data collection. The population targeted was the individual taxpayers across Malaysia, whereby a sample of 419 respondents involved in this study. T-test, One-Way ANOVA, and Pearson correlation analysis had been employed to analyse the data. The outcome of the study reveals that knowledgeable taxpayers are not better tax complaining of taxpayers in Malaysia. Further, the relationship between tax knowledge and tax compliance is negative and insignificant. This paper studied the association of tax knowledge with tax compliance level, which attempt to contribute to the literature and aids tax administration to intensify not only tax law educations but also tax penalties for tax evaders.

Audits, Audit Effectiveness, and Post-audit Tax Compliance

It is well established in theoretical and empirical research that more audits lead to more post-audit tax compliance. However, there is growing recognition that the deterrent effects of audits are more complicated than first appears, in part because audits do not always detect evasion. This study uses a laboratory experiment to investigate the effect of tax audits on post-audit tax compliance. An important feature of our experimental design is the addition of audit “effectiveness” to our audit mechanism, where effectiveness is defined as the share of undeclared income that the tax agency detects in an audit. This addition allows us to examine the effects of audit effectiveness on post-audit compliance. We also study whether the effect of audits depends on a taxpayer’s reporting behavior prior to an audit. Contrary to standard theoretical predictions, we find that tax audits have differential effects on post-audit compliance and that the effectiveness of audits determines these responses; that is, while effective audits increase post-audit tax compliance, ineffective audits have the opposite effect. We also find that relatively compliant taxpayers exhibit the strongest behavioral response to audits. Our findings suggest that the specific deterrent effect of tax audits is more ambiguous than much previous analysis suggests, with these effects dependent on the effectiveness of the audit process and on the taxpayer’s prior reporting behavior.

Determinants of Voluntary Tax Compliance (THE CASE CATEGORY A AND B TAXPAYERS IN DIRE DAWA ADMINISTRATION)

Improved tax compliance boosts the revenues available for supporting public services without increasing the current tax burden on compliant tax payers. The voluntary compliance behavior of the taxpayers is determined by various factors and identifying these factors and treating them accordingly should be the central premises of any tax system in order to maintain voluntary compliance at satisfactory levels. The study investigate the five key determinants of voluntary tax compliance from existing literature and previous studies which include Demographic factors, Economic factors, Institutional factors, Social factors and Individual factors. The main objective of the study is to examine the determinants of voluntary tax compliance behavior of category A and B tax payers in Case of Dire Dawa City Administration. To achieve the objective, the authors use Pragmatics or mixed research approach. To this end, the researchers used both primary and secondary data. The target populations of the study are category “A” and “B” tax payers in Dire Dawa City Administration. A sample of 366 category “A” and “B” tax payers is taken by using multi stage sampling procedure. The findings from the regression analysis indicate that, compliance is significantly affected by nine determinant factors which consist of: Age, Education, Tax knowledge, Financial Constraints, Absence of Fairness, Role of the Tax Authority, complexity of Tax System, Absence of Tax Audits and Government Spending. This study also evidenced that, other variables such as Gender, Sales turn over, Religion, Penalties, Type of organization and Tax Rate were not significant determinants of tax compliance id Dire Dawa City Administration. Keywords: Tax Compliance, Category A&B Tax Payers and order logit regression model DOI: 10.7176/RJFA/11-13-05 Publication date: July 31 st 2020

Data mining, fuzzy AHP and TOPSIS for optimizing taxpayer supervision

The achievement of accepting optimal tax need effective and efficient tax supervision can be achieved by classifying taxpayer compliance to tax regulations. Considering this issue, this paper proposes the classification of taxpayer compliance using data mining algorithms; i.e. C4.5, Support Vector Machine, K-Nearest Neighbor, Naive Bayes, and Multilayer Perceptron based on the compliance of taxpayer data. The taxpayer compliance can be classified into four classes, which are (1) formal and material compliant taxpayers, (2) formal compliant taxpayers, (3) material compliant taxpayers, and (4) formal and material non-compliant taxpayers. Furthermore, the results of data mining algorithms are compared by using Fuzzy AHP and TOPSIS to determine the best performance classification based on the criteria of Accuracy, F-Score, and Time required. Selection of the taxpayer's priority for more detailed supervision at each level of taxpayer compliance is ranked using Fuzzy AHP and TOPSIS based on criteria of dataset variables. The results show that C4.5 is the best performance classification and achieves preference value of 0.998; whereas the MLP algorithm results from the lowest preference value of 0.131. Alternative taxpayer A233 is the top priority taxpayer with a preference value of 0.433; whereas alternative taxpayer A051 is the lowest priority taxpayer with a preference value of 0.036.

Analisis Kepatuhan Wajib Pajak Kendaraan Bermotor dalam upaya Meningkatkan Penerimaan Pajak Daerah pada Kantor Bersama Samsat Jakarta Timur Tahun 2015-2018

This study aims to determine the compliance of motor vehicle taxpayers and to find out the obstacles, stimulus, and strategies that are carried out in increasing local tax revenues in East Jakarta’s One Roof System (Samsat). The research method is a Qualitative approach with descriptive research type. The results of the study on Compliance in East Jakarta Samsat are fairly good, this is supported by indicators from research such as good registration because taxpayers have followed and know the procedures well, the reports carried out by East Jakarta samsat are in accordance with the specified schedule, Payment of taxpayers in Samsat is fairly good with increasing taxpayers obeying each year in 2018 the highest percentage of compliant taxpayers reaching 60% with taxpayers totaling 1,296,666 but arrears in tax payable in East Jakarta are quite high in 2017 the amount of arrears from Taxes Motorized vehicles reached Rp. 90,568,276,707, - however, the realization of motor vehicle tax revenues has reached its target each year. Obstacles to the existence of taxpayers are not compliant because Taxpayers' awareness is still lacking due to busyness causing negligence and forgetting to carry out tax obligations and online payment processes are constrained by the lack of understanding of taxpayers about E-Samsat, while other obstacles are due to Taxpayer Data which is not appropriate, taxpayers who postpone payment of tax fines are waiting for the elimination of administrative fines so that the efforts made by East Jakarta Samsat provide strict sanctions to taxpayers who do not pay motor vehicle tax, provide taxpayers in paying taxes, and carry out programs elimination of administrative fines

THE ROLE OF INTERNAL AUDIT UNITS IN OVERSEEING THE PERFORMANCE OF TREASURER DUTIES AT LEGAL ENTITY

This study measures how the internal audit units play a role in a Legal Entity University in fulfilling their tax obligations so that they fall into the category of compliant taxpayers. The Legal Entity University is a domestic tax subject because it does not meet the criteria of certain units of a government agency that are excluded as domestic subjects, as referred to in Article 2 paragraph (3) letter b of the Income Tax Law. In the case of a Legal Entity University having a business in the form of a separate legal entity, each separate legal entity has its own taxation obligations. With that status, the role of internal audit in LEU is very important, especially in overseeing the implementation of income tax deductions and collection.

Designing Interest and Tax Penalty Regimes

Nearly all tax systems have some form of interest and tax penalty regimes. Interest payable on any late or underpayment of tax seeks to protect the present value of the tax amount to the government budget, whereas penalties are intended to deter taxpayers from defaulting on their tax obligations—and to punish them if they do—to achieve horizontal equity vis-à-vis compliant taxpayers. As interest and penalties serve very different objectives, they should not be applied in a mutually exclusive manner. This Tax Law IMF Technical Note focuses on the key issues that should be taken into consideration in designing interest and penalty regimes in tax legislations.

FATCA, CRS, and the Wrong Choice of Who to Regulate

FATCA and CRS have a major flaw that enables tax evaders to avoid reporting of their offshore financial assets. This noncompliance opportunity stems from the fact that many private entities are classified under FATCA and CRS as “financial institutions” (“FIs”), and as such these entities are required to report their beneficial owners. Where a tax evader holds financial assets through a private entity that he or she owns and manages, it is unlikely that this entity will report its owner to the tax authorities. At the same time, banks and other FIs that maintain the financial accounts of such entities are not required to report these entities’beneficial owners. Therefore, to avoid reporting, tax evaders can simply hold financial assets through private entities that are classified as FIs.This noncompliance opportunity is a result of a wrong choice of who to regulate. The drafters of FATCA and CRS decided to impose obligations on many private entities to report their beneficial owners, instead of imposing these obligations on banks and other FIs that maintain the financial assets of such entities. This policy also results in higher compliance costs for compliant taxpayers, and larger distortions and deadweight loss. Thus, it benefits tax evaders and harms compliant taxpayers. This Article proposes solutions that the U.S. Treasury and the OECD should consider.Building on this analysis, this Article explores a general question of regulatory design: how to choose which group of agents should be required to satisfy a regulatory obligation where that obligation can be imposed on one of two or more alternative groups of agents. When making this decision, the designers of the regulation should consider the cost-effectiveness of compliance, the potential distortions, and the likelihood of noncompliance for each of the alternative groups.

Commitment to Pay Taxes: A Field Experiment on the Importance of Promise

The ability of a tax authority to successfully collect taxes depends critically on both its relationship with the taxpayers and how strongly these taxpayers are committed to contributing to the common good. We present evidence on a new non-intrusive approach aimed at fostering the commitment to pay taxes. Using a between-subject design in a unique field setting, we experimentally test whether tax compliance can be increased by linking a voluntary promise of timely payment to a reward. We measure the change induced by an additional compliance promise through identifying the pure reward effect. We find that although previously compliant taxpayers are more likely to make a promise, the commitment to do so can improve payment behaviour. This effect, however, is strongly dependent on the type of reward to which the promise is linked. Compliance only increases when the reward is non-financial. No compliance effect is observed if cash is offered in return for promise fulfilment.

Commitment to Pay Taxes: A Field Experiment on the Importance of Promise

The ability of a tax authority to successfully collect taxes depends critically on both its relationship with the taxpayers and how strongly these taxpayers are committed to contributing to the common good. We present evidence on a new non-intrusive approach aimed at fostering the commitment to pay taxes. Using a between-subject design in a unique field setting, we experimentally test whether tax compliance can be increased by linking a voluntary promise of timely payment to a reward. We measure the change induced by an additional compliance promise through identifying the pure reward effect. We find that although previously compliant taxpayers are more likely to make a promise, the commitment to do so can improve payment behaviour. This effect, however, is strongly dependent on the type of reward to which the promise is linked. Compliance only increases when the reward is non-financial. No compliance effect is observed if cash is offered in return for promise fulfilment.

Lessons for Tax Administrators for the Introduction of the OECD's 'Enhanced Relationship' Model: The Australasian Experience

The rule of law imperative, so often espoused by industrialised nations, is under siege as tax systems attempt to interface with an ever increasingly complex and globally focused business environment. Compliance by taxpayers and enforcement by the tax administrator has become progressively problematic.Various policy responses have evolved. Attempts to rewrite and simplify taxation legislation have met with limited success. The development of tax intermediaries, an industry devoted to assisting taxpayers to comply has provided some relief. Novel approaches to tax administration have also featured.A particular of approach that has been adopted by a number of industrialised nations has been to move the tax administrator from a command and control posture to a more sophisticated and responsive form of regulation. The OECD has recently endorsed such an approach terming it the “enhanced relationship” model. For the last decade a derivation on this initiative has been championed in Australasia under the banner of “responsive regulation”. Pursuant to this model, the administrators’ approach reflects the posture adopted by the taxpayer. Thus, the focus is on extending assistance to compliant taxpayers and punishing recalcitrant taxpayers. It is thought that this model most effectively encourages voluntary compliance by taxpayers and thereby enhances the efficiency of tax administration.A feature of responsive regulation is for the tax administrator to form community partnerships with other stakeholders in the taxation system. Accordingly, tax administrators describe their relationship with intermediaries as collaborative or a partnership. An “enhanced relationship” in the OECD’s terms. This is in contrast to historical precedents where typically the relationship has been cast as adversarial.The notion of tax intermediaries, or more particularly tax practitioners, forming a partnership or enhanced relationship with tax administrator presents theoretical concerns. In particular, issues relating to conflicts of interest, lack of transparency, consistency in application and regulatory capture are conceivable. These concerns have been borne out by research in the Australasian environment. Whilst the partnership or enhanced relationship approach to tax administration may be worthy of consideration by other countries in the region the model demands further development and, especially in the Asian context, may need to cater for cultural nuances.