Tax Compliance Research Articles

Penerapan Pajak Penghasilan Pasal 23 Terhadap Kepatuhan Wajib Pajak

Compliance with Income Tax (PPh) 23 among companies varies greatly. Some companies comply, while others still face challenges in adhering to the regulations. Factors such as a lack of understanding of the regulations, complicated administration, or the intent to evade taxes often lead to non- compliance. As much as 82.5% of the realized state revenue in the third quarter of 2019 came from taxes. Income Tax and Value Added Tax were the largest contributors to the total tax revenue collected by the government. This article aims to identify the criteria that determine whether a company can be considered compliant with its tax obligations. This study uses qualitative research with descriptive data collection and focuses on the context provided by individuals or groups involved in the study. The focus of this research explains the criteria for companies that have complied with their tax obligations. The results of this study indicate that there are several tax compliance criteria according to Law Number 6 of 1983 concerning General Provisions and Tax Procedures, including timely registration, meaning that the taxpayer or the company registers itself after meeting the requirements set by the tax authorities and then starts its business.

Tax Expenditure and Evasion in the Value Added Tax in Latin America

This work estimates tax expenditure and evasion in the value added tax (VAT) in 16 countries in Latin America using a common methodology of tax gap analysis. The results obtained indicate that revenue losses in VAT due to tax expenditures and evasion are high and highly heterogeneous across countries. Tax expenditures were 2.1% of GDP on average in 2019, while evasion reached an average of 2.3% of GDP. Tax expenditures tend to be higher in countries with higher standard VAT rates and in poor countries. VAT evasion tends to be higher when the tax burden on the private sector is greater.

Financial Literacy and Tax Compliance by Medium, Small and Micro Enterprises in Nairobi City County, Kenya

Kenya Revenue Authority (KRA) has on numerous occasions failed to meet its revenue collection targets. Discord in tax compliance between Kenya taxpayers and collectors has been highly witnessed. Most SMEs engage in rampant tax evasion hence this study sought to establish effect of financial literacy on SMEs tax compliance level with a nucleus on the effect of budgeting, financial forecasting, credit management and investment diversification. Four critical theories of knowledge-based view, theory of planned behaviour, dynamic capabilities theory and contingencies theory fastened the research. A correlational research design was employed. 190 SMEs was sampled from the population of 846 manufacturing SMEs registered with KAM. Employing a semi-structured questionnaire, primary data was gathered. It was established that budgeting, financial forecasting, credit management and investment diversification had a positive notable effect on tax compliance. A budget was concluded to curtail SMEs expenditures and ensure tax compliance is on track for the future, accurate financial forecasts enable businesses to identify potential market risks and opportunities, there by facilitating better decision-making, effective credit management plays a crucial role in sustaining a healthy cash flow, minimizing financial risks, and building strong customer relationships. Additionally, investment diversification enables SMEs to attract new clients without requiring significant investments in additional personnel or resources. The study recommends that the SMEs should keep their budgeting flexible for better business results and veracity. The SMEs should project future sales by analysing market trends, historical performance, and other influencing factors. SMEs should properly define their credit management process and head for overseeing credit management and enforcing payment terms including handling late payments. SMEs could also benefit from establishing their own virtual mutual fund by investing in a selection of trusted companies that they regularly engage with in their daily operations.

Digital Tax Administration and Tax Compliance in Nigeria Informal Sector

Digital Tax Administration and Tax Compliance in Nigeria Informal Sector

Conceptual framework for AI-driven tax compliance in fintech ecosystems

This paper comprehensively reviews the integration of Artificial Intelligence (AI) into tax compliance processes within fintech ecosystems. It explores the theoretical foundations of AI technologies, such as machine learning and predictive analytics, and how they can automate tax reporting, auditing, and compliance monitoring. Conceptual models for AI-driven tax compliance are proposed, highlighting the potential for increased efficiency, accuracy, and cost reduction. The paper also examines challenges associated with AI adoption, including algorithmic biases, ethical concerns, data privacy issues, and regulatory hurdles. Strategies for overcoming these challenges and fostering broader adoption are discussed. Finally, the paper offers recommendations for fintech companies and policymakers, emphasizing the need for transparent AI models, bias mitigation, data privacy, and updated regulatory frameworks to ensure fair and effective AI-enabled tax systems.

Validation Of Matching Nik, Npwp And Assistance In Filling Out Annual Tax Returns With Ibi Kosgoro Tax Volunteers For 2024 Term Of Service

Matching of Population Identification Numbers (NIK) and Taxpayer Identification Numbers (NPWP), as well as assistance in filling out the Annual Tax Return (SPT). Validation of NIK and NPWP is a critical step in identifying and ensuring the validity of individual and company data in various administrative processes, especially those related to tax obligations. NIK validation involves matching a person's personal identity data with an official government database, while NPWP validation verifies the existence and validity of a company's tax identification number. These two processes support the accuracy of information used in various financial transactions and reporting. Apart from validation, assistance in filling out the Annual Tax Return is also important to ensure that the tax documents submitted comply with applicable tax regulations. This assistance can take the form of technical assistance in filling out SPT forms, consultation regarding income classification and processing tax deductions, as well as interpretation of the latest applicable regulations. Validation of NIK and NPWP as well as assistance in filling out the Annual SPT plays an important role in supporting administrative efficiency and tax compliance. By optimizing these processes, it is hoped that it can improve tax compliance, reduce the risk of administrative errors, and increase transparency and accountability in data management and financial reporting.

Research on Risk Control and Internal Control in Corporate Accounting

As the market economy rapidly develops, new opportunities arise for modern business growth, yet the complexity of financial risks and internal control issues that enterprises face also increases. To maintain stable development in the fierce industry competition and effectively tackle various challenges, internal managers and related staff need to transform traditional thinking, strengthening risk control and internal controls within accounting. Risk control mainly focuses on risks related to the distortion of accounting information, misappropriation of funds, and tax compliance, whereas internal control focuses on solving problems such as inaccuracies in financial data processing, deficiencies in the internal control system, and lack of internal communication. However, there is a mutual influence between risk control and internal control, indicating that they complement each other. This paper deeply analyzes the existing problems in risk control and internal control in current corporate accounting, proposes improvement measures according to specific conditions, and enhances the levels of risk control and internal control in corporate accounting through methods such as improving personnel professionalism, standardizing accounting standards, and constructing a comprehensive internal control system, thereby providing a strong guarantee for the sustainable development of enterprises.

The application of blockchain technology to improve tax compliance and ensure transparency in global transactions

The digital transformation of global commerce has fundamentally altered the landscape of tax administration, presenting unprecedented challenges for tax authorities worldwide. This comprehensive review examines the transformative potential of blockchain technology in revolutionizing tax compliance and enhancing transparency in global transactions. Through systematic analysis of existing literature, case studies, and implementation frameworks, we investigate how blockchain's core attributes of immutability, traceability, and decentralization can address critical challenges in contemporary tax administration. The review synthesizes evidence from multiple jurisdictions, demonstrating blockchain's capacity to reduce tax fraud, streamline compliance processes, and facilitate real time tax collection. Our analysis reveals that blockchain implementation in tax systems can potentially reduce tax gaps by 75-80% in VAT schemes and decrease compliance costs by 40-50% for businesses operating across multiple jurisdictions. The paper also explores critical challenges, including scalability issues, regulatory frameworks, and implementation barriers, providing a balanced perspective on both opportunities and limitations. Furthermore, we examine emerging trends in blockchain based tax solutions, including smart contracts for automated compliance, cross border information sharing protocols, and real time reporting frameworks. This review contributes to the growing body of literature on digital transformation in tax administration by offering a comprehensive framework for understanding blockchain's role in creating more efficient, transparent, and equitable tax systems. Our findings suggest that while blockchain technology presents promising solutions for tax administration challenges, successful implementation requires careful consideration of technical infrastructure, legal frameworks, and international cooperation mechanisms.

Factors influencing tax compliance among e-commerce traders in Indonesia

ABSTRACT Taxation in e-commerce is crucial for countries, businesses, and consumers. Combatting tax avoidance enhances compliance and fairness. Understanding e-commerce attitudes on tax morality is vital to curb evasion. This study aims to examine the relationship between the perception of tax rate, referral group, tax knowledge, tax regulation, and perception of equity and fairness on compliance of e-commerce trade in Indonesia. Data from 433 taxpayers reveal these factors significantly impact compliance. Insights inform effective tax policy design for e-commerce dynamics, aiding governments in responsive strategies.

Exploring the Potential of Blockchain Technology in Digital Tax Administration to Enhance Tax Compliance

This research seeks to enhance the technology acceptance model (TAM) by examining cognitive belief factors, specifically the influence of perceived usefulness and perceived ease of use, on taxpayers' intentions to utilize blockchain technology. This investigation explores both the direct and indirect effects of perceived enjoyment. This research also examined the impact of behaviour, specifically the trust factor, on perceived usefulness and perceived ease of use. We extended the TAM by assessing the mediating influences of the perceived enjoyment factor. The research employs a survey methodology. We collected data from 213 individual taxpayers. However, we were only able to process the data of 155 respondents. Questionnaires serve as a valuable tool for gathering data through Google Forms. We analysed the data using PLS-SEM. The research findings indicate that there is a form of mediation where the perceived usefulness of blockchain technology has a notable impact on taxpayers' intentions to use it, either directly or through the perceived enjoyment it brings. Perceived enjoyment also mediates the influence of perceived ease of use on taxpayers' intentions to use blockchain. Moreover, taxpayer trust has effectively influenced taxpayers' perceptions that technology is user-friendly and advantageous. To improve the level of service provided to taxpayers, tax authorities must leverage the advancements of the information technology era. The research findings make a valuable contribution to the tax authorities' readiness to adopt a blockchain-based tax administration system. The results highlight the significance of the authority's efforts to enhance taxpayers' intrinsic motivation when using tax information technology. Creating a user-friendly and enjoyable experience that brings joy, excitement, and comfort can achieve this.

Legal Uncertainty Regarding the Synergy of Tax Authorities and Corruption Court Authorities in Imposing Tax on Assets Proceedings of Corruption that Have Not Been Reported by Corrupt Perpetrators in Annual Tax Returns

This study discusses the legal uncertainty that affects the synergy between the Tax Authority and the Corruption Court Authority (Tipikor) in imposing taxes on assets resulting from corruption that have not been reported by the perpetrators in the Annual Tax Return (SPT). The lack of specific regulations governing the imposition of taxes on assets resulting from corruption causes differences in the interpretation and application of the law in the field, confusing law enforcement officers and business actors. In addition, this study identifies various obstacles faced in coordination between the two authorities, including communication problems, information sharing, and differences in objectives. Using a qualitative approach, this study collected data through interviews with legal practitioners and analysis of relevant legal documents. The results of the study indicate that the existing legal uncertainty and coordination constraints hinder efforts to effectively impose taxes on assets resulting from corruption, thereby harming state tax revenues. This study recommends the need to develop clearer regulations and better cooperation mechanisms between the Tax Authority and the Tipikor Court to improve tax compliance and reduce corrupt practices

Property Tax Compliance in Tanzania: Can Nudges Help?

Property Tax Compliance in Tanzania: Can Nudges Help?

A CRITICAL REVIEW OF TAX AUDIT QUALITY FACTORS: A RESEARCH SYNTHESIS

The quality of tax audits plays a critical role in ensuring the transparency, accuracy, and integrity of the taxation system, which in turn contributes to public confidence and higher tax compliance. In an increasingly complex and dynamic business world, understanding the factors that affect the quality of tax audits is becoming increasingly important. Therefore, this study aims to systematically review the existing literature to identify and analyze the factors. The motivation of this study is to fill the knowledge gap and provide a comprehensive guide for researchers and practitioners in the field of taxation. Data sources are obtained from academic journals by identifying the main themes and patterns that encompass from around the world, countries in Southeast Asia, and narrow down to Malaysian studies. The categorization of tax audit quality studies into these three groups allows for the identification of variations in the variables and research techniques used, as well as the comprehension of the cultural and regional context for the audit quality study issue. The results of the study show that there are several main factors that affect the quality of tax audits, including auditor skills, knowledge, experience, information technology (IT), job satisfaction and time. The study also found that the interaction between these factors can strengthen or weaken the quality of tax audits. In conclusion, this study provides an in-depth view of the factors that affect the quality of tax audits and underlines the importance of a holistic approach in dealing with this issue. The findings of this study can help tax authorities, audit firms, and policy makers especially to Inland Revenue Board of Malaysia (IRBM) in devising more effective strategies to improve the quality of tax audits.

The Implementation of Income Tax Article 22 on Goods Purchased by the General Affairs Section of the Regional Secretariat of Jember Regency

Purpose: This research paper aims to assess the compliance of the Regional Secretariat of Jember Regency with the Ministry of Finance Regulation 59/PMK.03/2022 on calculating, collecting, depositing, and reporting taxes on purchased goods, focusing on the implementation of Income Tax Article 22.Method: The study uses Action Research with qualitative methods, gathering data through observations and interviews with staff in the General Affairs Section to evaluate their tax practices.Practical Applications: Findings indicate effective calculation and collection of Income Tax Article 22 but highlight a need for clearer regulations regarding reporting Income Tax Returns (SPT). These insights can enhance tax compliance and improve public service delivery in local governance.Conclusion: The study confirms that the General Affairs Section complies with the Ministry of Finance Regulation in calculating and collecting Income Tax Article 22. However, it identifies a regulatory gap in SPT reporting, contributing to a broader understanding of local tax compliance issues.

Tax audit on tax revenue of SMEs in Nigeria

Government expenditure is crucial to the macroeconomic income determination model and taxes constitute a major source of revenue for the government. However, low tax compliance jeopardises the government’s capacity to realise its tax revenue potential. Consequently, tax audits are critical to enhancing tax compliance, which then helps to boost tax revenue. Although some empirical studies have examined the relationship between tax compliance and tax revenue scarcely any has investigated the influence of tax audit on tax compliance. To this end, this study sought to examine the influence of tax audits on tax compliance: and tax revenues from SMEs in Nigeria: the study employed a cross-sectional survey design consisting of 205 Owners and managers of SMEs in Nigeria. Convergent and divergent validity and composite reliability tests served as validity and reliability tests of the structured questionnaire designed by the authors. The study used a structured questionnaire to elicit the desired data from the respondents and used structural equation modelling to analyse the data. The results indicate that desk and field tax audits have a significant positive influence on tax compliance. Tax compliance, desk and field tax audits have a significant positive influence on tax revenue. In addition, tax compliance provides a partial linkage for the relationship between tax audits and tax revenues from SMEs. The study contributes significantly to accounting theory by showing that deterrence to tax evasion through tax audit is critical to tax compliance in Nigeria.

Predicting Nigerian Stock Market Returns Based on Daily Business News Headlines

This study predicts daily returns of the Nigerian Stock Exchange (NSE) using Nigerian daily news headline. The Vanguard newspaper is used as the source of information, to collate 11 years (2February 2, 2012 to September 29, 2023) of daily news headlines and data on the daily returns All-Shares Index (ASI) of the Nigerian Stock Exchange NSE was collared from the website https://ng.investing.com/indices/nse-all-share-historical-data. Text mining techniques such as Term Frequency-Inverse Document Frequency (TF-IDF) are applied to pre-determine important words and sentences and their influences on daily market returns. N-gram sentences are used to build bigrams and trigrams, which helps us determine their positive and negative returns. The result shows that when words such arabia, crypto, renewal, paris, and tradermoni appear in news headlines, there is negative returns in the stock market, but when words such as lawmakers, multinationals, ebonyi, constraints and double appear in the news headline, there is positive return. For bi-gram sentences when sentences such as price dip, earning rise, tax compliance, and econbank partners appear, there is often negative return, on the other hand when sentences such as trustfunds pensions, inter agency, business insurance, index rise and forex supply appear in the news headline, there is often positive return. And for tri-gram sentences, when sentences such as profit taking NSE, government private sector, cross boarder trade, cargo tracking note, and capital market sec, there is often negative return in NSE, on the other hand, when sentence such as poor purchasing power, naira watch cbn, mtn google empower, google empower smes and external reserve hit appear in the news headlines, there is often a positive returns in the stock market. Three machine-learning models were used to build the predictive models. The models were logistic regression with a prediction accuracy of 0.52, Support Vector Machine (SVM) with an accuracy of 0.51, and K-nearest Neighbour (KNN) with an accuracy of 0.99, indicating higher prediction evidence of news headlines by the KNN model for the NSE index over the alternative models. We limited fitting the models using only unigrams and left fitting models using bigrams and trigram sentences for future research.

Leveraging Artificial Intelligence (AI) and Blockchain for Enhanced Tax Compliance and Revenue Generation in Public Finance

Leveraging Artificial Intelligence (AI) and Blockchain for Enhanced Tax Compliance and Revenue Generation in Public Finance

Exploring the Impact of Awareness, Tax Amnesty, and Socialization Efforts on Motor Vehicle Tax Compliance

As governmental needs for funds increase alongside developmental demands, there is a concerning lag in taxpayer compliance, especially noted in the context of rising vehicle registrations. This study aims to examine the impact of awareness, tax amnesty, and tax socialization on motor vehicle taxpayer compliance at the Badung SAMSAT Office. The sample comprised 100 registered motor vehicle taxpayers from the Badung Regency SAMSAT Office in 2022. Results indicate that tax socialization, tax amnesty, and taxpayer awareness significantly enhance compliance with motor vehicle tax obligations at the Badung SAMSAT Office. This research contributes to the literature by providing empirical insights into how awareness, tax relief, and tax socialization influence motor vehicle taxpayer compliance at the specified location.

Social Norms And Norm Elicitation In Behavioral Economics

Classical economic models assume individuals make rational decisions, but behavioral economics seeks to refine these models by considering cognitive limitations. A vital aspect of this refinement is the role of social norms—unwritten rules and commonly accepted behaviors within communities. Research indicates that social norms significantly influence decisions related to giving, tax compliance, cooperation, saving, and recycling. Game theory highlights the interconnectedness of individual choices, showing that people are more likely to adhere to social norms when they believe others will do the same. It also explains how norms counterbalance in communities, where deviations from expected behavior can result in social sanctions or reputational damage. Understanding how individuals perceive and respond to these norms is crucial. Personal experiences and moral values shape individual perceptions of social norms, leading to their diversity. Norm elicitation, a research method, explores how people interpret social norms and adjust their behaviors accordingly. The norm elicitation method enables researchers to understand individuals' attitudes toward social norms and to predict norm-based behaviors by allowing social norms to be measured separately from behavior in behavioral economics. This study aims to elucidate the concepts of social norms and norm elicitation, exploring their significance in behavioral economics.

Self-Concept Priming and Message Framing As Strategies for Improving Individuals’ Compliance: A Case Study of Bicultural Taxpayers’ Tip Reporting

ABSTRACT This study investigates the efficacy of two strategies, active self-concept priming and message framing, designed to encourage standard-compliant behavior. We prime 82 bicultural U.S. taxpayers from a collectivist culture through informational videos to activate either an individualist or collectivist self-concept. The message is framed to match (versus not match) the primed self-concept. Results reveal an ordinal interaction where participants primed with a collectivist self-concept have higher tax compliance than those primed with an individualist self-concept, and the highest compliance occurs when the message has a relational focus (i.e., collectivist prime match) compared to a self-focus (i.e., individualist prime match). Supplemental analysis suggests that raising the salience of the collectivist-self over the individualist-self indirectly affects taxpayers’ intentions to comply through the mediator of taxpayers’ attitudes. The findings highlight the potential of behavioral priming as a low-cost strategy for boosting tax revenues that fund services that benefit the public interest at large. Data Availability: Data are available from the authors upon request.