Tax Fraud Reporting: The Effect of Envious Motive and Financial Reward

Widuri, Retnaningtyas and JEVERA, ILLONA and HANDIWIKARSA, JANICE ZERLINDA (2019) Tax Fraud Reporting: The Effect of Envious Motive and Financial Reward. [UNSPECIFIED]

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Abstract

This research examines the influence of envious and financial reward on tax fraud reporting. The focus in this research is on the motivation of a tax payer in reporting other tax payer who committed tax fraud. This research use fully crossed between-subjects design in experimental studies. This research use primary data which is obtained by using experimental studies as a media. The sample used in this research is data from 50 personal tax payers in Indonesia, with an accidental sampling method. There are two motivations in this research, first is intrinsic motivation that we mention as the existence of envious. The envious here means a tax payer who committed tax fraud has higher net income so that they have bigger funds or capital to develop their business, compared to tax payers who obey paying taxes. Extrinsic motivation in this research is financial reward, which means the tax payers who report the tax fraud (whistleblower) to the Pusat Pengaduan Direktorat Jenderal Pajak will get amount of money as a reward. This research found that both of this motivation have significant effect on the intention to report a tax payer who committed tax fraud. The expectation of this study is to show that an envious motive and financial reward are positively influence on tax fraud reporting, with moral obligation and demography as control variables. This research contributes to Indonesia Tax Authority in optimizing the participation of whistleblower, which will minimizing the occurrence of tax fraud. Whistleblowing activities are expected to improve tax compliance that will create justice for all tax payers in Indonesia

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