UNAIR NEWS – Tax avoidance is a widespread phenomenon in various countries. To regulate various parties’ behavior in the taxation system, a set of rules is needed.
A reliable system and strong internal control are needed to prevent misconduct and ensure the accuracy of the tax information. Tax itself is a long-term contractual relationship between the taxpayer and the government.
Then, what kind of system is effective to increase compliance? A system is like a drug, to answer that question, it is necessary to recognize the typology of taxpayers and the factors causing non-compliance.
From this question, Prof. Dr. I Made Narsa, SE., M.Si., Ak., CA. and his team was motivated to do a study. This study presents various approaches that can be considered in designing an effective taxation system with a systematic review.
“This study was conducted by reviewing 35 international journals published in scopus indexed journals,” he explained.
The lecturer of Faculty of Economics and Business, conducted a study with three approaches to the development of a system for tax reporting with guaranteed accountability. They were the authoritarian, responsive, and integrated fiscal procedure approach.
The results showed that according to economic crime, tax compliance is influenced by several things, such as risk considerations by the tax authority and the level of penalties associated with behavior that is contrary to tax law and tax enforcement.
“Therefore, an authoritarian approach is an effective tool for controlling illegal activities and auditing which is more recommended in any case,” he said.
According to the psychological approach, he continued, taxpayers are obedient for several reasons, such as a positive attitude towards taxation, encouragement from people who considered it important and have control over behavior.
Other factors were also identified affecting tax compliance, including personal and social norms, moral taxes, social pressures, perceptions of wisdom, attitudes towards the political and taxation system, and minimization of tax compliance cost.
“The sociological approach views behavior is influenced by relationships between individuals, individual relationship with groups, and group relationships with other groups or social relations,” he explained.
There are several factors that have been proven affecting tax compliance, such as tax collection behavior, perceived service orientation, fair laws, and friendly treatment of tax officials during the inspection process, treatment from tax officials, taxpayers’ perception on the quality of tax services.
“Therefore, responsive procedure is an effective tool to control illegal activities,” he added.
Finally, according to the trust and legitimacy approach, taxpayer compliance is influenced by a combination of the ability, goodwill, and integrity of the tax man. This forms the trust of taxpayers and efforts to enforce compliance with the power held by the government.
“The combination of authoritarian and responsive integrated procedures is an effective tool to control illegal activities,” he said.
Which system is most effective for increasing tax compliance? It depends on the majority of taxpayer typologies and the dominant factors that affect tax compliance in a country. (*)
Author: Sandi Prabowo
Editor : Khefti Al Mawalia
Prastiwi, D., Narsa, I.M. & Tjaraka, H. 2019. Sintesis Sistem Akuntansi Perpajakan. Jurnal Multiparadigma Universitas Brawijaya, Vol 10. No 2.