Tax Penalties Research Articles

Increasing Individual Taxpayer Compliance by Taxpayer Awareness

The objectives of this study were to ascertain and examine the level of taxpayer awareness, individual taxpayer compliance, and the impact of taxpayer awareness on individual taxpayer compliance at the Pratama Tax Office. The employed data analysis techniques encompassed descriptive analysis and verification analysis. The data collection methodology employed in this study entailed disseminating questionnaires to tax officials at a specific Pratama Tax Office in Bandung City. The sample consisted of 40 individuals who were directly involved in the subject matter under investigation. The study employed the Exhaustive Sampling (Census) technique under Nonprobability Sampling. The research findings revealed that the product-moment correlation analysis yielded a coefficient of 0.860, indicating a highly significant and robust relationship between the variables. The results of the simple linear regression analysis indicate that there is a positive relationship between Taxpayer Awareness and Individual Taxpayer Compliance. The equation derived from the analysis is Y = 8.305 + 0.834X, where Y represents the level of Individual Taxpayer Compliance, and X represents Taxpayer Awareness. The coefficient of determination, which measures the proportion of variance in Individual Taxpayer Compliance (Y) explained by Taxpayer Awareness, is 0.739. This condition indicates that Taxpayer Awareness has a significant influence of 73.9% on Individual Taxpayer Compliance. The remaining 26.1% of the variance in Individual Taxpayer Compliance is attributable to other factors not examined in this study, including tax amnesty, e-filing, tax audits, tax penalties, tax bills, and other relevant variables.

Kepatuhan Wajib Pajak: Studi Aspek Egoisme, Altruisme, dan Sanksi Pajak

Kepatuhan Wajib Pajak: Studi Aspek Egoisme, Altruisme, dan Sanksi Pajak

2022년도 국세기본법 판례회고

In 2022, less than 10 Supreme Court’s Decisions pronounced, which include the issues of the Framework Act on National Taxes(“FANT”) and were published in the Judgement Gazette. Among them, this article is focusing on the 4 meaningful cases.
 First, “Supreme Court’s Decision August 25, 2022, 2017du41313”, reaffirms the position of existing precedents on the requirements and criteria for reorganizing transactions to deny a circumvention transactions or multi-level transactions for the purpose of tax evasion under Article 14(3) of the FANT. The decision is valid as it applies the principle of substantive taxation principle on circumventive or pyramid transactions in relation to calculating the tax base.
 “Supreme Court Decision May 26, 2022, 2022du32825”, reaffirms the position of existing precedents that determine the existence of fraud based on whether the counterparty files the VAT return, pays or refunds VAT. According to these precedents, even though the same taxpayers engaged in the same fictitious transaction, in the case of corporate tax, the taxpayer’s actions alone are used to determine whether fraud is committed, otherwise in the case of VAT, in addition to the taxpayer’s actions whether the taxpayer is aware that the taxpayer’s deduction of VAT will result in a decrease in national tax revenue. However, this decision is not justifiable as it violate tax jurisprudence because (1) it applies different criteria for different tax categories without any reasonable basis, despite the fact that the relevant regulations stipulate ‘fraud’ in the same way regardless of the tax category, and (2) despite the fact that the statute does not require such an additional requirement for long-term limitation for imposition of VAT, the decision requires the subjective requirement (i.e., recognition of the fact that it will result in a decrease in the national tax revenue) only in the case of VAT,.
 On the other hand, “Supreme Court Decision May 26, 2022, 2019du60226”, regarding whether an investor in an Fisheries Partnership are an ‘oligopolistic stockholder’ who is liable for secondary tax, held that an investor in an Fisheries Partnership cannot be such an ‘oligopolistic stockholder’ because he is not a stockholder or a partner in corporations. This decision is justified in light of the principle of strict interpretation of tax laws.
 Lastly, “Supreme Court Decision January 14, 2022, 2017du41108” is the first decision to explicitly determine that the reference point for determining whether there is a justifiable reason to exempt the penalty tax is the deadline for filing and paying taxes under the each tax law.

POTENTIAL FACTORS MOTIVATING TAX COMPLIANCE AMONG SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)

Tax compliance is a compliance of taxpayers with the tax law of the country in terms of declaring their income, filing a return and paying any taxes that are due on time. Tax compliance is essential for the government and tax authorities to achieve the revenue collection target as taxes are the main sources of income to the country. The Inland Revenue Board in Malaysia (IRBM) has recorded 17% increase of tax collection in 2021 compared to 2020. In 2021, more than RM140 billion was collected from three million people and more than 400,000 businesses. Small and medium-sized enterprises (SMEs) play an important role since they contribute a significant source of government’s tax revenue to ensure sustainable economic growth and development. Recognising SMEs played a crucial role in contributing a large portion of income to the government, this study aimed to identify factors motivating tax compliance among SMEs. The attitude of taxpayers towards tax is influenced by the specific knowledge on taxation, in which the taxpayers have a good understanding of the basic tax system and laws. Thus, tax knowledge among SMEs increases tax compliance as they are more responsible to meet their tax duties. This study also found that high tax morale influencing tax compliance of SMEs. They believe that paying taxes is a sense of moral obligation for the benefits of society. Meanwhile, tax penalties have a significant impact on tax compliance by promoting a positive attitude towards the tax regulations system. In other aspects, tax simplicity has reduced the complexity of the tax system and led to increase of the tax compliance among SMEs. The findings have shown possible strategies for tax authorities to achieve higher level of tax compliance among SMEs towards attaining targeted tax collection for the country.

Налоговые правоотношения и налоговая ответственность: анализ отдельных предложений по совершенствованию законодательства

Examination of the issues of regulatory matter of social relations in terms of taxation, application of measures of tax liability, sanctions remains one of the priorities for modern representatives of the scientific environment. However, the problems of law enforcement in the area in question require a systematic analysis of the most relevant gaps and contradictions in the regulation of social relations and tax liability. As a result of studying the proposals made by researchers to improve the concept of tax law, it is proposed to make a number of changes in the legislation of the Russian Federation: to supplement the definition of tax with the wording of the purpose, denoting an explicit connection between the interests of public subjects and ordinary members of society, to fix in Part 2 Article 11 of the Tax Code the content of tax regulation process, definitions of tax liability and penal-ties. Conclusion dwells upon the fact that the only sanction in tax law is a fine, and an expansive interpretation of this sanction is impossible.

Imposition of Tax Penalties and Interest and Its Influence on Tax Compliance of Small and Medium-Sized Enterprises in Nairobi County, Kenya

The purpose of this study was to determine the effect of the imposition of tax penalties and interest on tax compliance of small and medium-sized Enterprises (SMEs) in Nairobi County, Kenya. The economic deterrence theory was used as the theoretical anchor of the study. The population of the study was 195,000 SMEs in Nairobi County, Kenya. The descriptive cross-sectional design was used in the study which focussed on a sample of 399 constituting the managers and owners of SMEs in Nairobi County. Data was gathered using a structured questionnaire that contained closed-ended questions. The collected data was analyzed using descriptive statistics and ordinary least squares regression with the aid of SPSS. The study findings indicated that the imposition of penalties and interest has a positive and significant influence on tax compliance of small and medium enterprises in Nairobi County, Kenya (β = 0.642, t = 10.633, p < 0.05). This, therefore, depicts that the imposition of interest and fines makes SMEs to be more tax compliant. The study findings have implications for tax authorities to improve the effectiveness of the tax penalties system that should complement the self-assessment system. The tax authorities should also ensure that the penalty system is equitable, proportionate, clearly defined, and even-handedly administered to encourage voluntary tax compliance and deter tax offenders. The tax authority should also increase the penalty amount to collect more revenue and make it significant for SMEs that do not comply with tax regulations.

Gojek Driver Partners in Banjarmasin: Factor Affecting Tax Compliance with Tax Sanctions as a Moderation Variable

This study aims to empirically test and analyze the effect of tax awarness, tax knowledge and tax morale on tax compliance and the interaction variables between tax awareness, tax knowledge and tax morale with tax penalty of Gojek driver partners in the city of Banjarmasin. Moderation variable on this study is Tax Penalty. This study uses secondary data with a sample of 157 Gojek partners in Banjarmasin using a random sampling method. The data then analyzed by using multiple regression analysis model and Moderated Regression Analysis (MRA). The results of this study indicated that tax awareness and tax knowledge had a significant effect on tax compliance. However, ttax morale had no significant effect on tax compliance. In addition, tax penalty could not moderate the relationship between tax awareness and tax knowledge with tax compliance. However, it can moderate tax morale relationship with tax compliance.

Offshoring or reshoring: the impact of tax regulations on operations strategies.

After decades of outsourcing to low-cost countries, companies are restructuring their production footprint globally. Especially having experienced supply chain disruption caused by the unprecedented Covid-19 pandemic for the past several years, many multinational companies are considering bringing their operations back home (i.e., reshoring). At the same time, the U.S. government proposes using tax penalties to motivate companies to reshore. In this paper, we study how a global supply chain adjusts its offshoring and reshoring production decisions under two different circumstances: (1) under traditional corporate tax regulations; (2) under the proposed tax penalty regulations. We analyze cost variants, tax structures, market access and production risks to identify conditions where global companies decide to bring manufacturing back to their domestic countries. Our results show that multinational companies would be more likely to relocate the production from the main foreign country to an alternative country that enjoys even lower production costs under the proposed tax penalty. As identified by our analysis and as well as numerical simulations, reshoring can only occur in rare situations such as when the production costs in the foreign countries are close to that in the domestic country. Besides potential national tax reform, we also discuss the impact of the Global Minimum Tax Rate proposed by the G7 on global companies' offshoring/reshoring decisions.

Assessment of Tax Enforcement in Selected Small and Medium Enterprises (SMEs) in Kigali City, Rwanda

The purpose of the study was to assess the level of tax enforcement as it is exerted by Rwanda Revenue Authority (RRA) among SMEs in Kigali city. The indicators under consideration are Tax system, Training on tax, Tax Audit, Tax rewards and Tax penalties. Administered questionnaire was used to collect data. Finding showed that generally, tax system was appreciated at a moderate level (Mean=2.67). The average level of RRA trainings is low (Mean=2.31). The General level of tax audit practice is high level (Mean=3.72). Generally, the level of Tax Rewarding is Moderate (Mean=3.37). Generally, the level of appreciation on Tax Penalties was Moderate (Mean=2.53). As recommendations, RRA should change its tax system. This is because level of appreciation of the taxpayer to the system is moderate with a mean of 2.67. The are to improve include helping taxpayers to pay only when they have made profits. Facilitating the taxpayer to increase the capacity to pay their tax liabilities, making tax law friendly user by SMEs taxpayers. RRA should increase training for SMEs taxpayers. This is because the level of this indicator is low. The low level has been found in all areas of training assessed. RRA should increase the rewords to the best taxpayers so that this practice is recognized by all taxpayers. It should also avail them the standards of selection and to the public. This will increase trust and competition in complying to the tax laws.RRA should modify the penalties given to taxpayers who have broken the tax laws. This is because the taxpayers said that the tax penalties discourage many SMEs. The tax penalties should be reduced and increase other methods of enforcement such as education, rewords and audit. Taxpayers should inform themselves from different sources about the tax system as applicable in Rwanda. This will help them to comply with the law and avoid penalties

Pengaruh Pelayanan Dan Sanksi Perpajakan Terhadap Kepatuhan Wajib Pajak Orang Pribadi (Studi Pada PT. Amanah Finance Di Makassar)

Tax compliance is the behavior of a taxpayer in doing all tax obligations and use taxation rights with still sticking to the legislation perpajakan. Regarding tax compliance is often the case the last few years is the emergence of non-compliance with taxation. This non-compliance will lead to avoidance and tax evasion what will cause a reduction in tax revenue to the state treasury Indonesia. The purpouse of this study was to determine the effect of service quality, and tax penalties in compliance WP OP in PT. Amanah Finance Makassar. The samples used were 100 respondents to the method of determining the sample was purposive sampling. The data collection techniques questionnaire. Data analysis technique used is multiple linear regression analysis. The result obtained by the quality of service and tax penalties and significant positive effect on compliance WP OP.

Ultimum Remedium Principle in Indonesian Tax Regime – Impact and Challenges Post-Omnibus Law

The tax laws are built to ensure that every citizen obeys their obligation on tax. Or, in other perspectives, to guarantee the state does not lose the right to collect tax from the people. Tax laws are part of the state administrative laws. As a consequence, the penalty that is equipped with tax law is also known as administrative sanctions. However, since tax is an essential state element, tax law provided a criminal penalty to give a more complex impact and the value of a deterrent effect (known as administrative penal law). Every tax jurisdiction has characteristics and depends on the state’s main objectives and preferences. Indonesia’s tax regime prioritizes tax collection and the recovery of state losses rather than sending the taxpayer to jail. This concept is known as ultimum remedium or the last remedy principal. After the Corvid-19 pandemic, Indonesia tries to raise the economy through many breakthroughs in tax law, including the enactment of Law of the Republic of Indonesia N0.11 of 2020 on job creation (also known as omnibus law) and Law of the Republic of Indonesia No.7 of 2021 on Harmonization on Tax Regulation. Both regulations have the same spirit to boost Indonesia’s economy through fiscal policy, including relaxation of the tax penalty. With its impact and challenges, this policy is expected to create a broader opportunity for Indoesia tax authorities to collect more tax

FACTORS AFFECTING TAXPAYER COMPLIANCE IN PAYING LAND AND BUILDING TAX AT SEMARANG CITY

<p class="Default"><em>This study aims to examine the effect of attitudes, tax sanctions, and taxpayer awareness on the compliance of PBB taxpayers in Semarang City. Data were collected by questionnaire method given directly to respondents at PBB payment places. Respondents were selected by convenience sampling method, namely respondents who were willing to fill out the questionnaire. Respondents were asked to answer questions on the questionnaire related to the variables of taxpayer attitudes, taxpayer awareness, tax sanctions, and PBB taxpayer compliance. The number of respondents was set as 100 respondents. The questionnaires that were filled in for all question items were 80 questionnaires. 20 questionnaires could not be processed because they were not filled in. Data analysis was carried out with multiple linear regression models. This study found a positive influence of tax penalties on tax compliance, but no effect of taxpayer attitudes and taxpayer awareness on taxpayer compliance in Semarang city. </em><em>The findings are expected to be taken into consideration by the Semarang City Government in making policies on PBB collection</em><em>.</em></p><p class="Default"><strong><em>Keywords</em></strong><em>: taxpayer attitude, tax sanctions, taxpayer awareness, taxpayer compliance</em><em></em></p>

Factors Affecting Tax Compliance of MSMEs in Dipolog City

This research is made focused on assessing what factors could affect the tax compliance of MSMEs in Dipolog City, one of the major economic drivers are; (1) Tax Inspection Possibility, (2) Tax Rates, (3) Tax Penalties, (4) Tax Policies Complexity, (5) Social Norms and (6) Tax Knowledge. Through random sampling, 96 business owners/managers/bookkeepers of specifically retail MSMEs in Dipolog City were extracted as respondents. A descriptive correlational quantitative method was used in this study, utilizing standardized adapted questionnaires for gathering data which was analyzed and interpreted using frequency, percentage distribution, mean, Kruskal-Wallis test, and Spearman Rho. Findings revealed most of the enterprises belong to a micro level and are still in the business for 2-5 years. Furthermore, among the factors identified, only Tax inspection Possibilities, Tax Penalties, and Tax Knowledge have significant relationships with tax compliance. This means that the possibility of being inspected, delayed payment of obligations, and their knowledge of tax laws increased the respondents’ awareness of tax compliance. If a taxpayer has knowledge about tax laws, payments, and tax rates applied to his/her business, compliance increases. It is also recommended that the taxing authority must conduct a statutory tax seminar to MSMEs as taxpayers.

The Influence of Tax Sanction Avoidance and Taxpayer Income on Motor Vehicle Tax Compliance in Jakarta with Taxpayer Awareness as Moderation

This study aims to examine the effect of tax sanctions avoidance and the amount of taxpayer income on the compliance of motor vehicle taxpayers in Jakarta with taxpayer awareness as moderation. The distribution of the Google form questionnaire (primary data) with the subject, namely motor vehicle taxpayers whose vehicles have Jakarta plates (plate B), and processed using Smart PLS by testing data validity using outer loading and data reliability using construct reliability and validity. The result obtained by this research by bootstrapping method is that the avoidance of tax sanctions has no effect. In contrast, the amount of taxpayer income and taxpayer awareness have a significant positive effect on motor vehicle taxpayer compliance, and taxpayer awareness does not moderate the effect of tax penalty avoidance and the amount of taxpayer income on motor vehicle taxpayer compliance. Submission of research to be input and information regarding the views of taxpayers regarding the compliance of motor vehicle taxpayers in Jakarta where the government can also continue to improve and develop facilities continue to be adequate and support taxpayers in carrying out their taxpayer compliance. This facility must also be effective and efficient so that taxpayers feel facilitated in carrying out their compliance.

The Influence of Tax Sanction Avoidance and Taxpayer Income on Motor Vehicle Tax Compliance in Jakarta with Taxpayer Awareness as Moderation

This study aims to examine the effect of tax sanctions avoidance and the amount of taxpayer income on the compliance of motor vehicle taxpayers in Jakarta with taxpayer awareness as moderation. The distribution of the Google form questionnaire (primary data) with the subject, namely motor vehicle taxpayers whose vehicles have Jakarta plates (plate B), and processed using Smart PLS by testing data validity using outer loading and data reliability using construct reliability and validity. The result obtained by this research by bootstrapping method is that the avoidance of tax sanctions has no effect. In contrast, the amount of taxpayer income and taxpayer awareness have a significant positive effect on motor vehicle taxpayer compliance, and taxpayer awareness does not moderate the effect of tax penalty avoidance and the amount of taxpayer income on motor vehicle taxpayer compliance. Submission of research to be input and information regarding the views of taxpayers regarding the compliance of motor vehicle taxpayers in Jakarta where the government can also continue to improve and develop facilities continue to be adequate and support taxpayers in carrying out their taxpayer compliance. This facility must also be effective and efficient so that taxpayers feel facilitated in carrying out their compliance.

The slippery slope framework: A comprehensive evaluation of factors affecting trust and power

Many empirical studies have been conducted to test the assumptions of the slippery slope framework (SSF). However, although the SSF theory has introduced several tax compliance factors that are believed to have associations with trust in tax authorities and power of tax authorities, most studies tend to include only the two main domains of trust and power in the analysis. None of these studies comprehensively investigates the factors. Therefore, this study is dedicated to fully elaborating on these factors and their correlations with the two main domains of trust and power separately and simultaneously. The results show that most factors are proven to significantly influence trust and power. Tax penalties, norms, distributive fairness and retributive fairness significantly and positively influence trust, while audit probabilities, tax penalties, attitudes, norms and retributive fairness have significant and positive correlations with power. The results also confirm the main SSF assumptions that trust leads to voluntary compliance, while voluntary compliance positively affects overall tax compliance. However, this study fails to demonstrate the relationship of power with enforced compliance, while enforced compliance is found to negatively affect overall tax compliance.

Tax clientele and share repurchase execution

This study hypothesizes that low-tax clientele firms are reluctant to engage in share repurchases because their shareholders’ dividend tax penalty is less than the expropriation of strategic trading in share repurchases. As a result, firms formed by low-tax clientele execute share repurchases in a cost minimization strategy when they consider the tax status of most of their shareholders. Using novel data from Taiwan, this research finds that, compared to high-tax clientele firms, low-tax clientele firms tend to use market timing skills to repurchase stocks and get a larger price discount in the repurchase execution. The findings enrich the dividend tax penalty and market timing literature and offer practical implications for shareholder activism.

The Impact of Perception of Justice on Tax Compliance Behavior through the Mediating Role of Social Support: An Empirical Study in Pakistan

The government adjusts its financial obligations and collects taxes to pay for the public through taxes. Tax behavior varies from individual to individual. Tax audits and fines are also policies to collect tax amounts. The study aims to determine tax compliance behavior. A quantitative approach is applied to obtain the respondent's perception of justice in tax laws. Overall total number of questionnaires sent to bar councils was 400, of which 325 lawyers responded. The problem is that Pakistan needs a better tax collection system; therefore, many problems are faced during tax collection. The justice system is better for recovering the tax penalties, whereas procedural justice investigates the compliance of individuals about the tax. Taxpayers also find ways to reduce the amount of tax and make deduction claims by hiding some of their assets. Tax audit is also a significant field to assess and measure fraud in the tax collection system. Results differentiate that there is a positive and significant relationship between tax compliance behavior and perception of justice. So, it rejects the null hypothesis and shows a significant relationship. If the individuals cooperate with the government and perform their duties well, then the structure of the tax system can survive and collaborate in the economy of Pakistan.

Determinants of Tax Compliance Behaviour and Sustainable Economic Growth Among MSMEs in Nigeria

This study examined the effects of determinants of tax compliance behaviour on sustainable economic growth of micro, small and medium enterprises (MSMEs) in South-South, Nigeria. The study anchored on the economic deterrence theory and cross sectional survey research design was used on a sample of MSMEs in South-South, Nigeria. The primary data was collected using a questionnaire with a five-point Likert scale and a sample size of 535 using convenience sampling. The data collected were analysed using descriptive statistics, bivariate analysis while multivariate analysis was used in the estimation of the regression model developed for the study. The findings revealed that tax penalty has positive and significant influence on sustainable economic growth among MSMEs in south-south of Nigeria; tax fairness has positive and significant influence on sustainable economic growth among MSMEs in south-south of Nigeria; perceived opportunities of tax evasion has negative and insignificant influence on sustainable economic growth among MSMEs in south-south of Nigeria; tax audit has positive and significant effect on sustainable economic growth among MSMEs in south-south of Nigeria; and tax system has positive and significant influence on sustainable economic growth among MSMEs in south-south of Nigeria. On the basis of the findings, the study concluded that tax determinants such as tax penalty, tax fairness, tax audit, tax system and opportunity for evasion affects the level of sustainable economic growth among micro, small and medium enterprises in South-South Nigeria. The study recommended amongst others that government should expand the tax administration system in Nigeria and strengthen tax collection schemes and follow up procedures on MSMEs. Also frequent tax reforms designed and implemented that would increase revenue generation through tax collection and consequently stimulating sustainable economic growth of Nigeria.

FAKTOR YANG MEMPENGARUHI KEPATUHAN WAJIB PAJAK DI KABUPATEN KUNINGAN

This study aims to analyze the effect of tax knowledge and tax penalties on taxpayer compliance in Kuningan Regency. Data were obtained from 150 respondents using a questionnaire that had been tested for validity and reliability. Multiple linear regression analysis was used to test the hypothesis. The results showed that tax knowledge and tax penalties significantly influence taxpayer compliance. This indicates the importance of tax knowledge and penalty policies in improving taxpayer compliance.Keywords: Tax Knowledge, Tax Penalties, Taxpayer Compliance, Taxpayers, Kuningan Regency.