DETERMINANTS OF TAX COMPLIANCE FOR BUSINESS ACTORS AND INDEPENDENT WORKERS IN THE PERSPECTIVE OF THEORY OF PLANNED BEHAVIOR AND THEORY OF FISCAL PSYCHOLOGY

Authors

  • Betha Februari Khristy Universitas Brawijaya
  • Zaki Baridwan Brawijaya University
  • Mohamad Khoiru Rusydi Brawijaya University

Abstract

Purpose This study aims to analyze determinants of tax compliance intentions and tax compliance behavior using constructs derived from the Theory of Planned Behavior, i.e., tax morale, social norms, detection risk, penalty magnitude, and tax complexity; and Theory of Fiscal Psychology, i.e., perception about the government.

Design/methodology/approach This research was conducted on 120 business actors and independent workers in the Greater Malang region using a survey and partial Least Squares analysis performed in SmartPLS.

Findings This study finds that tax compliance intention is determined by tax morale, social norms, penalty magnitude, tax complexity, and perception about the government; and that tax compliance intention, detection risk, and penalty magnitude influence tax compliance behavior. Furthermore, detection risk does not affect tax compliance intention, and tax complexity is not influential on tax compliance behavior.

Practical implications Based on the findings, the government is advised, through the Directorate General of Tax, to develop policies and approaches supporting tax morale, strengthen community bases to create tax-aware environments, maintain law enforcement through investigation and application of penalties, build an easy-to-reach taxation system, and create transparency in order to enhance taxpayer’s trust to the government that eventually leads to higher tax compliance intention and behavior.

Originality/value The findings support the inclusion of the Theory of Fiscal Psychology to develop the Theory of Planned Behavior in order to explain tax compliance behavior and provide a new perspective that, in the context of tax compliance, not all aspects of perceived behavioral control have the same effect on both behavioral intention and produced behavior.

Keywords Tax compliance behavior; Theory of Planned Behavior; Theory of Fiscal Psychology.

Paper type Positive paradigm

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Published

2022-08-01

How to Cite

Betha Februari Khristy, Baridwan, Z., & Khoiru Rusydi, M. (2022). DETERMINANTS OF TAX COMPLIANCE FOR BUSINESS ACTORS AND INDEPENDENT WORKERS IN THE PERSPECTIVE OF THEORY OF PLANNED BEHAVIOR AND THEORY OF FISCAL PSYCHOLOGY. The International Journal of Accounting and Business Society, 30(2), 37–54. Retrieved from https://ijabs.ub.ac.id/index.php/ijabs/article/view/668

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