THE RELIGIOSITY OF TAXPAYERS AND THE POWER OF TAX AUTHORITIES IN INDONESIAN INDIVIDUAL TAXPAYER COMPLIANCE CONTEXT

Abstract

This research aims to empirically prove the influence of coercive power, legitimate power, and religiosity on tax compliance. Also, we investigate the influence of tax morale and the impact of tax morale on tax compliance in a sample context that experiences changes in tax regulations. The research sample was 199 taxpayers in Indonesia who were determined using purposive sampling. We show that tax power based on legitimacy effectively increases tax compliance and morale. However, on the contrary, the tax coercive approach reduces tax compliance. The research results also show that high religiosity is a high belief in God, dedication, and religious fervor. Thus, in the Indonesian context, religiosity encourages its followers to increase tax morale and compliance as proof that they comply with government regulations (as ulul amri). We also find that tax morale increases tax compliance. This research implies
that Indonesia’s tax authority or government should take policies that can improve their legitimacy power and reduce coercive power approaches to increase tax morale and compliance.