The Role of the Power of Tax Authority in Voluntary Tax Compliance. The Case Study of Jakarta, Indonesia
The Role of the Power of Tax Authority in Voluntary Tax Compliance. The Case Study of Jakarta, Indonesia

Summary/Abstract: This study aims to analyze the voluntary tax compliance of individual taxpayers from deterrence variables. The power of tax authority as the deterrence variable consists of the scale of tax authorities’ power, the probability of being detected and fines. To reduce the forms of tax authority's power on compliance, procedural fairness as its moderation is placed. This study was conducted in Jakarta and its surroundings considering the performance of tax revenue in this area higher than in other regions in Indonesia. The respondents were individual taxpayers who have private business or free employment. The primary data was obtained through survey method. To analyze the relationship between variables used the partial least squares structural equation modeling methods (PLS-SEM). The result showed that the power scale of tax authority affected the voluntary tax compliance while the probability of detected and fine were not. Procedural fairness weakened the influence of the power scale of tax authority on voluntary compliance. This study supports the theory of deterrence and slippery slope theory. The results of this study are useful for determination public policy.

• Details
• Contents