Individual Tax Compliance: Trust versus Power

Widuri, Retnaningtyas and JIE, MELLYANA, and CHRISTIE, ANGELA (2019) Individual Tax Compliance: Trust versus Power. [UNSPECIFIED]

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Abstract

The objective of this study regards with the issue that Indonesia is facing about tax revenue. Currently, Indonesia does not achieve the tax revenue target. Thus make the tax authority more focuses on tax payer compliance by encouraging voluntary compliance through increased trust to increase tax revenue. However, tax authority has many strategies that the tax authorities were forced to choose various strategies to achieve their goals. One of them is issuing power-based regulations that have impact on enforced tax compliance. Thus encouraging researches to verify the relation between the role of power and trust with individual tax compliance and focused on tax avoidance that is mostly done by the individual tax payer. In this research, using the Structural Equation Model to know the correlation between trust and power towards voluntary tax compliance and enforced tax compliance on individual tax payers who does independent personal services with a revenue above and below 4.8 billion per year. This research is expecting to contribute to the tax authority to find out the factors that encourage tax payer compliance. The expectation of this study is to show that trust gives a positive effect on tax compliance by mediating with voluntary compliance. While Power does not affect tax compliance even though it has been mediated by forced compliance.

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