Does Coercive Power Influence The Relationship of Tax Morale on Tax Evasion

Mangoting, Yenni and SUMARNO, VANESSA ALMA and GLORIA, TALITA and INDRIANI, SONIA DWI (2020) Does Coercive Power Influence The Relationship of Tax Morale on Tax Evasion. [UNSPECIFIED]

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Abstract

This study aims to examine the effect of tax morale against tax evasion and examine the role of coercive power as a moderating variable that can strengthen or weaken the direct relationship of tax morale to tax evasion. The study uses 100 individual taxpayers who earn income from various sources. Methods of data collection are done through a survey. This research data analysis using partial least square structural equation models (PLS-SEM) and using WarpPLS software. The result of this study indicates that tax morale acts negatively towards tax evasion. The higher the tax morale, the tax evasion will decrease. The moral of taxpayers in this study provides a positive impact on reduces tax evasion. The results also showed that coercive power as a moderator variable was not proven to weaken or strengthen the effect of tax morale on tax evasion. The taxpayer in this study realised that the tax obligations should be implemented with its own consciousness without coercion mechanism with sanctions or compliance tests through tax audits. Besides, the tax obligation in this study sees that law enforcement through tax audits and sanctions will lead to high compliance costs. This finding provides important implications that the taxpayer does not want to feel forced to fulfil the tax obligations. Tax compliance that is forced through sanctions and tax audits does not guarantee that tax evasion will decrease. In fact, through the implementation of voluntary tax compliance, taxpayers with their awareness can fulfil their tax obligations which can have an impact on increasing tax compliance

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