Improve Tax Compliance Research Articles

Building a Culture of Compliance: The Influence of Tax Socialization and Inclusion on Indonesian Micro, Small, and Medium Enterprises (MSMEs) Taxpayers

Taxes serve as the cornerstone of any nation's economic framework, functioning as both a regulatory mechanism and a primary source of government revenue. They are indispensable for managing taxpayer behavior, ensuring a steady stream of state income, and financing essential public services and infrastructure development. In Indonesia, the compliance of micro, small, and medium enterprises (MSMEs) is pivotal to the nation's fiscal well-being. This study delves into the factors that influence MSME taxpayer compliance, specifically focusing on the role of tax socialization, tax inclusion, and the involvement of tax volunteers. A quantitative research approach was adopted, involving the distribution of questionnaires to MSME taxpayers in Indonesia. The data collected was then analyzed using SPSS software to test the hypotheses regarding the impact of tax socialization, tax inclusion, and tax volunteers on taxpayer compliance. The findings of this study reveal that tax socialization and tax inclusion positively influence the level of tax compliance among Indonesian MSME taxpayers. Furthermore, the involvement of tax volunteers also has a positive impact on enhancing taxpayer compliance. This study underscores the importance of tax socialization and tax inclusion in fostering a culture of compliance among MSMEs in Indonesia. The positive role of tax volunteers in assisting taxpayers and promoting compliance is also highlighted. These findings have significant implications for tax authorities in their efforts to improve tax compliance rates and enhance revenue collection.

Digital tax policies and compliance challenges for MSMEs in Indonesia

As digital Micro, Small, and Medium Enterprises (MSMEs) rapidly grow in Indonesia, ensuring their compliance with tax regulations has become an urgent priority. This study delves into the challenges and innovative solutions to enhance tax compliance, focusing mainly on digital content creators. This study examines the challenges and solutions for improving tax compliance among digital Micro, Small, and Medium Enterprises (MSMEs) in Indonesia, mainly digital content creators. The research aims to analyze the impact of tax sanctions, modernization of tax administration, and tax policy reforms on the compliance behavior of these entities. A qualitative approach was employed, utilizing interviews and focus group discussions (FGDs) with informants selected through purposive sampling. The findings indicate that tax sanctions significantly influence compliance, but modernization of tax systems improves transparency and efficiency, thus enhancing compliance. Policy reforms, particularly those tailored to the unique needs of digital businesses, offer the flexibility needed for fulfilling tax obligations. The novelty of this research lies in the proposed model that integrates tax sanctions, administrative modernization, and policy reforms, addressing the unique characteristics of digital MSMEs. The practical implications suggest that implementing a user-friendly digital tax system, supported by clear guidelines and targeted reforms, can simplify compliance for digital MSMEs, leading to better tax reporting. These findings provide actionable insights for policymakers in designing effective, adaptive tax policies for Indonesia's rapidly growing digital economy.

Analysis of research trends on tax morale in indexed journals in Indonesia

This study aims to analyze the research trends on tax morale in taxation journals indexed in Indonesia from 2019 to 2024. The method used is a systematic literature review by collecting data from various journals accredited by the Science and Technology Index (SINTA). The results show a significant increase in the number of publications discussing tax morale, especially in 2020, influenced by the COVID-19 pandemic. Factors such as trust in the government, social norms, and strict sanctions were found to have a positive impact on tax morale and tax compliance. The study also found that tax morale can be an effective tool for improving tax compliance through a holistic approach, including tax education, tax audits, sanctions, and incentives. This study provides important contributions to the taxation literature by presenting an in-depth analysis of tax morale research trends and their implications for tax policy in Indonesia. These findings are expected to help policymakers design more effective and sustainable taxation strategies.

Exploring the impact of AI-driven and blockchain-enabled tax filing systems on smes in the era of technological innovation: A review of benefits, challenges, and adoption barriers

The emergence of blockchain technology and artificial intelligence (AI) presents transformative opportunities for tax compliance, especially for small and medium-sized enterprises (SMEs). These technologies promise to enhance tax system accuracy, efficiency, and transparency. However, their adoption is accompanied by significant challenges and barriers. This review analyzes the benefits, challenges, and future prospects of integrating AI and blockchain technologies into tax systems, with a focus on their impact on SMEs. It seeks to provide insights into how these technologies can reshape tax compliance and identify areas requiring further research. The review revealed that AI enhances accuracy and compliance through advanced predictive models and explainable AI, while blockchain ensures transparency and trust with its immutable ledger and smart contracts. Despite these benefits, SMEs face technical and financial constraints, such as high implementation costs and integration complexities. Regulatory and legal challenges, including evolving tax laws and data privacy requirements, further complicate adoption. Additionally, resistance to new technologies and skill gaps within SMEs hinder widespread implementation. Scalability and customization issues also pose significant barriers. In conclusion, AI and blockchain technologies substantially improve tax compliance but come with notable challenges. These technologies promise enhanced accuracy and efficiency for SMEs, yet overcoming barriers related to cost, integration, and regulation is essential for successful adoption. It was recommended that future research should focus on developing SME-specific solutions, addressing regulatory adaptations, and conducting comparative analyses of traditional versus AI-driven tax systems. By tackling these areas, stakeholders can better support SMEs in leveraging AI and blockchain technologies for more effective and transparent tax compliance.

Cooperative Compliance in Poland: The Question of Equality

An increasing number of tax jurisdictions are implementing the concept of cooperative compliance into their tax systems. It aims to improve tax compliance by building an enhanced relationship between tax authorities and taxpayers. In principle, the programme is aimed at large taxpayers capable of engaging in aggressive tax optimization that is detrimental to state revenue. Dedicating the programme exclusively to large taxpayers may raise doubts about whether it violates the principle of equality before the law. In Poland, the legislation governing the cooperative compliance programme was introduced on July 1, 2020. As in other countries, it was targeted at large taxpayers. The article therefore discusses the question whether the Polish legal regulations on cooperative tax compliance are in line with the constitutional principle of equality.

Pendampingan Pelayanan Pemadanan NIK NPWP pada Kantor Pelayanan Pajak Pratama (KPP) Sidoarjo Barat

Data matching of Population Identification Number (NIK) as Taxpayer Identification Number (NPWP) needs to be done. This is an order from Law (UU) Number 7 of 2021, Presidential Regulation Number 83 of 2021, and Regulation of the Minister of Finance Number 112/PMK.03/2022. Regarding the implementation of data matching of NIK to NPWP which must be accelerated. The Directorate General of Taxes (DJP) of the Ministry of Finance (Kemenkeu) has set the time for matching NIK to NPWP to be fully implemented in mid-2024. Tax Volunteers support Taxpayers (WP) in matching Population Identity Number (NIK) and Taxpayer Identification Number (NPWP). Matching NIK NPWP functions as part of the steps to improve tax compliance and administration in Indonesia. The purpose of this comparison is to inform the truth and reliability of personal data and tax information of Indonesian citizens.

An exploratory study on supplier acceptance of and engagement in a national tax lottery designed to improve tax compliance

Purpose: To determine business owners’ perceptions of and support for a national tax lottery system in South Africa. Motivation: Tax compliance in developing countries is a challenge for governments, which depend on tax revenue to provide public goods and services. A tax lottery system has been recommended for South Africa, where customers would demand receipts for purchases that serve as lottery tickets and create paper trails that would expose tax non-compliant businesses. Literature indicates that small businesses find the process burdensome, costly, and detrimental to competitiveness and growth, particularly when customers are lost to larger businesses that are better equipped to routinely supply receipts. Design: An exploratory approach, using an online survey of suppliers to gauge their perceptions of a South African tax lottery system was followed. Findings: Of the respondent, 51% expressed support for a tax lottery system, and thus, at an exploratory level, business owners in South Africa do not seem to support a tax lottery. This is an important finding, since suppliers play an integral role in the implementation of a tax lottery system. Further research should be conducted to determine the views of a more representative sample of suppliers, to determine whether they would play their part in administering such a system. Suppliers’ biggest concern was government corruption in implementing such a system. Contribution: This study contributes to the body of knowledge on tax lotteries, particularly from a developing country perspective; furthermore, few empirical studies take the supplier perspective and acceptance of a tax lottery into account.

Application of The Philosophy of “Gotong Royong” To Improve Tax Compliance in Indonesia

Purpose: This research aims to offer the concept of gotong royong (mutual cooperation) in Indonesia as one of the factors that must be applied in order to improve tax compliance in Indonesia Methodology/approach: This study is a qualitative study with a library-research approach. Findings: Gotong royong, which means mutual cooperation, is a philosophy that has been ingrained in the Indonesian people; therefore, it should be an important component in carrying out counseling, socialization, and tax inclusion education for the Indonesian people. So, the perspective on tax obligations and compliance shifts from what was only an obligation to becoming a common necessity in building an independent and more sovereign Indonesian state. Practical implications: Theoretically, this research provides a new perspective on the application of social interaction theory and the theory of planned behavior, although the concepts offered in this article still require further study at the practical level. Originality/value: Research related to tax compliance has mostly been carried out using a quantitative survey approach or an empirical study approach. However, this research examines tax compliance from a different perspective, namely the philosophy of tax as a tool in developing the country, which is actually an embodiment of the local philosophy of Indonesia called gotong royong. To the best of the researchers' knowledge, this has not been widely implemented.

Implementasi Sistem E-Tax Sebagai Moderasi Pengaruh Kepuasan Pengguna, Kualitas Informasi, Kualitas Sistem, dan Biaya Kepatuhan Terhadap Kepatuhan Perpajakan

This study aims to examine the role of e-tax system implementation as a moderating variable in the relationship between taxpayer attitudes and tax compliance. This study involved 214 individual taxpayers who used the e-tax system, with the sampling technique using purposive sampling. The analysis method used is Structural Equation Modelling (SEM) which is processed using IBM SPSS AMOS 26 software. The results showed that the quality of the e-tax system has a positive effect on tax compliance, while compliance costs have a negative effect on tax compliance. In addition, the implementation of the e-tax system is proven to strengthen the effect of system quality on tax compliance, and weaken the effect of compliance costs on tax compliance. These findings indicate that improving the quality of the e-tax system and managing compliance costs can be effective strategies to improve tax compliance in the digital era.

Pelatihan Akuntansi Perpajakan Mitra Industri Properti

This community service activity focuses on strengthening the understanding and application of tax accounting in the property industry, essential for improving tax compliance and efficiency. The targets of this activity include industry partners in the property sector located in Surabaya and Batu, East Java, as well as students involved in developing their practical skills. This activity aims to strengthen the skills of industry partners in tax calculation and reporting and develop solutions that can be integrated into their tax accounting practices. The methods used include observation to identify challenges and needs of industry partners, theoretical and practical training on tax calculation, and evaluation of activity results through questionnaires. The evaluation results showed a significant increase in the knowledge and skills of industry partners related to tax accounting. The evaluation also identified the need to integrate tax planning into management and develop more efficient tax accounting applications.

Comparative Analysis of Ethical Measures and Auditing Standards in Managing Tax Evasion: Effectiveness and Impact

This article presents a comparative analysis of the effectiveness and impact of ethical measures versus auditing standards in managing tax evasion. Tax evasion poses significant challenges for both businesses and governments, leading to economic losses and reputational damage. This study investigates two primary strategies for combating tax evasion: the implementation of ethical policies within organizations and the enforcement of auditing standards by regulatory bodies. By evaluating existing literature and empirical data, the article assesses how each approach influences tax compliance and their relative effectiveness. The research design is validated for its reliability in testing the hypotheses and provides consistent results supported by a literature review of existing scholarly work. The research reveals that while both ethical measures and auditing standards are crucial in addressing tax evasion, ethical practices tend to offer more substantial benefits in fostering long-term tax compliance. Enhanced by technological advancements, the auditing process has become more efficient, yet it often encounters resistance and limitations. The findings suggest that integrating strong ethical frameworks within businesses, alongside rigorous auditing practices, is the most effective strategy for managing tax evasion. The study provides valuable insights for policymakers and organizations seeking to improve tax compliance and reduce evasion.

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.

Corporate taxation in Spain: analyzing efficiency and revenue potential

This paper offers a comprehensive analysis of Spain’s corporate tax system through the lens of the Laffer curve and Buoyancy index, assessing its efficiency in generating revenue. The study finds that Spain is nearing the Laffer curve’s optimal tax rate, beyond which tax revenue may decrease with rate hikes. The Buoyancy index reveals a fluctuating response of tax revenues to economic shifts, indicating vulnerability in economic downturns. We trace Spain’s corporate tax evolution, examining current structures and recent policy reforms, and explore how corporate taxation influences economic activities and investment. The paper proposes policy recommendations, including reassessing the corporate tax rate, advocating structural reforms for a wider tax base, and policies promoting economic growth. Emphasis is placed on counter-cyclical fiscal policies, regular evaluation of tax incentives, improving tax compliance, and Spain’s role in global tax coordination. This research contributes to fiscal policy discussions, advocating a balanced tax approach for sustainable economic development and guiding policymakers toward resilient fiscal strategies in a dynamic economic environment.

The Efficiency of Interactive Voice Response Systems and Tax Compliance: A Field Experiment by the California Franchise Tax Board

ABSTRACT To shed light on the influence of interpersonal fairness on tax compliance, the California Franchise Tax Board conducted a field experiment to examine how efficiency of Interactive Voice Response (hereafter, IVR) systems affects tax collection. We find that taxpayers calling the temporary phone line with greater IVR system efficiency (treatment group) pay a significantly larger percentage of their tax deficiencies than the control group during the study period, and this difference is driven by IVR system efficiency. We also find that improving IVR system efficiency increases the likelihood of making payments within the treatment group. Our results support embracing interpersonal fairness principles to encourage tax payments. Our research extends the literature on the service paradigm of tax compliance by providing U.S.-based evidence and has implications for the tax authorities seeking to improve tax compliance efficiency, as tax collection generally becomes more difficult and costly with time. JEL Classifications: H21; H24.

ANALISIS INCREASE TAX DAN TAX AMNESTY TERHADAP TAX ASSURANCE DALAM PROBABILITAS PEMERIKSAAN PAJAK

Charge is a required commitment owed by people or substances. In this context, the SAMSAT office participates in public services, contributing to fiscal monitoring and supervision of tax amnesty implementation. It was found that individuals tend to disagree more than agree with tax amnesty, but tax amnesty tends to improve tax compliance. The research method used was qualitative, involving interview sessions at the SAMSAT office. The goal was to gather detailed information about various aspects of public services, with the main objective of providing constructive suggestions to enhance service standards. Interviews were conducted at the Samsat UPT Wilayah I Kota Pontianak, covering the overall profile and structure of the institution, as well as documents related to tax regulations. The research results indicate that increased taxes impact tax assurance, affecting both expenditures and central taxes. Tax rates in daily collections are subject to change, and tax assurance plays a crucial role in handling and overseeing local taxpayers. The government ensures compliance with existing tax regulations, monitored by the Regional Revenue Agency and the State Audit Board, with annual routines to engage the general public in a timely manner.

VAT/GST harmonisation challenges for digital assets such as bitcoin and NFTs in the EU following Case C-264/14 (Skatteverket v David Hedqist)

The verdict in the case of Skatteverket v. David Hedqvist (Kokott, Advocate General (2015) Opinion delivered on 16 July 2015, Case C-264/14. ECLI:EU:C:2015:498. Available via TandF Online. https://doi.org/10.1080/20488432.2015.1096631.) is crucial for understanding how the EU treats virtual currencies, such as Bitcoin, in terms of Value-added Tax (VAT). This case involved the Swedish citizen David Hedqist who was seeking clarity from the Swedish Tax Authority Skatteverket on exchanging money for Bitcoins. The case set a precedent exempting such services from VAT under the EU’s VAT Directive (Council Directive 2006/112/EC (2006) On the common system of value added tax. OJ L347. Available via EUR-Lex. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32006L0112. Accessed 3 January 2024.). Specifically, Article 135(1)(e) of the EU’s VAT Directive excludes those transactions from VAT that include money-related transactions, that include deals or negotiations about different kinds of money, including cash and coins that are officially legal tender, i.e., used for buying things, except for collectable items like special coins or notes that people collect but do not use as a means of payment. Skatteverket (Kokott, Advocate General (2015) Opinion delivered on 16 July 2015, Case C-264/14. ECLI:EU:C:2015:498. Available via TandF Online. https://doi.org/10.1080/20488432.2015.1096631.) clarified that cash transactions are not subject to VAT, even though they are considered services for VAT purposes.Despite this clarity, the evolving landscape of digital assets’ uniqueness, including Non-Fungible Tokens (Alawadhi KM, Alshamali N (2022) NFTs Emergence in Financial Markets and their Correlation with DeFis and Cryptocurrencies. Applied Economics and Finance 9:108. https://doi.org/10.11114/aef.v9i1.5444. Available at CORE. https://core.ac.uk/download/pdf/524752899.pdf. Accessed 3 January 2024.), continues to challenge VAT frameworks across member states.Using insights from the European Commission’s Working Paper 1060, this article advocates for a unified approach tailored to digital and crypto services, addressing complexities in NFT taxation to reduce uncertainty and foster market cohesion. The findings highlight the importance of legislative changes and increased cross-border collaboration, as well as provide recommendations for policymakers and stakeholders in the digital finance and platform sector (European Commission (2024) Working Paper 1060. Available at: https://ec.europa.eu/info/publications/working-paper-1060_en. Accessed 3 March 2024.). By proposing strategic harmonisation of VAT enforcement, the research helps to improve tax compliance and support long-term growth in the EU’s digital market (Cappai M (2023) The role of private and public regulation in the case study of crypto-assets: The Italian move towards participatory regulation. Computer Law & Security Review 49:105831. Available at: https://www.sciencedirect.com/journal/computer-law-and-security-review/vol/49/suppl/C.; Hasa J (2021) Digitaalisten palvelujen rajat ylittävä kuluttajakauppa ja laajeneva arvonlisäveron erityisjärjestelmä. Licentiate thesis. University of Lapland, Faculty of Law. Available at: https://lauda.ulapland.fi/bitstream/handle/10024/64771/Hasa_Juho.pdf?sequence=1. Accessed 1 March 2024.).

Enhancing Taxpayer Compliance Through Fiscal Transparency, Participation and Accountability: Insights from Key Figures of Islamic Boarding Schools in Depok City

Purpose — This study explores the perspectives of key figures from Islamic boarding schools (Kiai Pesantren) in Depok City, Indonesia, regarding the efforts to promote fiscal transparency, participation and accountability (FTPA) by the government for enhancing taxpayer compliance. Design/Methodology/Approach — This study is based on the interpretivist paradigm. Keywords related to Muslims’ obligations, zakat and taxes were sourced to find relevant literature. A thematic analysis was conducted of in-depth interview data from Kiai Pesantren regarding their perspectives on state fund management. Findings — The results show the importance of FTPA in state fund management, especially when aligned with Islamic principles. Fiscal transparency involves directing tax funds towards poverty alleviation alongside infrastructure development. The involvement of religious organisations can be aimed at fostering moral responsibility among officials, while citizen participation can be facilitated through open data for budget planning. The accountability of public officials must be accompanied by efforts to minimise corruption and enforce strict punishments for corrupt activities. Moreover, fully crediting zakat payments for Muslim taxpayers could improve tax compliance, but this requires assurance through future policy reforms. Originality/Value — This study contributes to the literature by integrating Islamic principles into the framework of FTPA. Research Limitations/Implications — Broader insights into tax compliance management and support for Sharīʿah-based taxation could be addressed by involving Islamic scholars across countries.

Research on Tax Collection and Administration Efficiency in the Context of “Governing Taxation by Numbers”

In modern national governance systems, tax collection and administration efficiency is a key indicator to measure the performance of the tax system. With the proposal and implementation of the concept of “governing taxation through numbers”, how to use digital technology to improve tax collection and administration efficiency has become an important issue. Focusing on the background of the policy of “governing taxation by numbers”, this article selects Anhui Province as a case area to conduct an in-depth analysis of the impact of the policy of “governing taxation by numbers” on the efficiency of tax collection and administration in practical applications, and explores strategies to improve tax collection and administration efficiency, aiming to optimize Provide theoretical and practical reference for tax management, improving tax compliance and reducing collection costs.

Teori Atribusi: Memahami Hubungan Kualitas Layanan, Pemahaman Perpajakan, Implementasi Sanksi dan Kepatuhan Pajak

Tax is a mandatory contribution made by citizens to the government in accordance with the provisions of the law, which is the largest source of income for the state. However, in Indonesia, there are still problems in tax activities, including low tax ratios and low levels of tax compliance. This research aims to investigate the influence of service quality, understanding of taxation, and implementation of sanctions on tax compliance in West Kalimantan Province. The research method used is quantitative with a multiple linear regression analysis approach using the help of the IBM SPSS program in processing the data. Primary data was collected through questionnaires distributed to people who have a Taxpayer Identification Number (NPWP) and regularly report Tax Returns (SPT) to the tax authority. The research results show that service quality does not have a significant effect on tax compliance, while understanding taxation and implementation of sanctions significantly influence tax compliance. The level of tax compliance can be increased by improving service quality, understanding of taxation, and the effectiveness of implementing sanctions. These findings provide valuable insights for tax authorities in improving tax compliance and increasing overall tax revenue.

Boosting Tax Compliance through Education in Indonesia

This study examines the factors affecting boarding house tax compliance in Candi District, Sidoarjo Regency. Despite the high tax potential, many business owners neglect their tax obligations. Using a quantitative descriptive approach, data were collected from 33 boarding house owners via questionnaires and analyzed using multiple linear regression. Results indicate that taxpayer knowledge, understanding, and awareness significantly enhance compliance. This research highlights the need for targeted educational and awareness programs to improve tax compliance among boarding house owners in industrial areas. Highlight: High Potential: Industrial area boarding house taxes are significantly underutilized. Key Factors: Knowledge, understanding, and awareness boost taxpayer compliance. Policy Implications: Educational programs improve tax compliance in industrial areas. Keyword: tax compliance, boarding houses, taxpayer knowledge, Sidoarjo, quantitative analysis