Voluntary and Enforced Tax Compliance: Evidence from Small and Medium-sized Enterprises in Indonesia

Abstract

The “slippery slope” framework assumes that trust and power are alternative approaches to attaining taxpayers’ compliance and for reducing tax evasion. This study aimed to investigate whether the impacts of power and trust dimensions previously found in developed countries also exist in developing countries, such as Indonesia. Data were collected through a researcher-administered questionnaire survey of 274 small business taxpayers and were then analyzed through stepwise linear regressions. The results show that trust significantly influences voluntary tax compliance, but neither trust nor power promotes enforced tax compliance. Ultimately, this study’s findings only partly support the assumptions of the “slippery slope” framework. This study also contributes to current global literature on the influence of trust and power in voluntary and enforced tax compliance in developing countries, especially in Asia.

Citation

Inasius, F. (2019), "Voluntary and Enforced Tax Compliance: Evidence from Small and Medium-sized Enterprises in Indonesia", Advances in Taxation (Advances in Taxation, Vol. 26), Emerald Publishing Limited, Leeds, pp. 99-111. https://doi.org/10.1108/S1058-749720190000026006