Building Trust and Enhancing Tax Compliance: The Role of Authoritarian Procedures and Respectful Treatment in Indonesia

Dewi Prastiwi 1,* and Erlina Diamastuti 2
1 Accounting Department, Faculty of Economic, Universitas Negeri Surabaya, Surabaya 60231, Indonesia
2 Accounting Department, Universitas Internasional Semen Indonesia, Gresik 61122, Indonesia;
erlina.diamastuti@uisi.ac.id
* Correspondence: dewiprastiwi@unesa.ac.id; Tel.: +62-31-99421835

Abstract

This study delves into the impact of tax collection behavior on tax compliance among individual taxpayers in Indonesia, with a specific focus on two distinct behaviors: respectful treatment and authoritarian procedures. The research employs a cross-sectional survey method, targeting the population of individual taxpayers registered at the Regional Tax Office of East Java I. The sample size of 400 was selected through random sampling. Attitudes, opinions, and perceptions regarding tax collection behavior were measured using a Likert scale. Tax officials’ conduct was categorized as either respectful treatment or authoritarian procedures. The research employed Structural Equation Modeling (SEM) with the Partial Least Squares (PLS) software to assess the outer model. Hypothesis testing was conducted to scrutinize the relationship between tax collection behavior and taxpayer compliance. The study’s results indicate that respectful treatment positively influences compliance, whereas the utilization of authoritarian procedures leads to an increase in tax non-compliance.

Notably, trust emerged as a mediating factor within this relationship. The findings underscore the crucial role of tax officials in cultivating trust with taxpayers by demonstrating respect, upholding integrity, and executing their responsibilities transparently and equitably. By fostering an environment of trust, tax compliance can be bolstered, fostering a collaborative approach that aids taxpayers in fulfilling their tax obligations.

Keywords: tax collecting behavior; tax compliance; respectful treatment; authoritarian procedures; trust mediation

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