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The Role of Taxpayer Awareness in Enhancing Vehicle Tax Compliance in Indonesia: An Attribution Theory Approach

Author

Listed:
  • Annathasia P. Erasashanti
  • Yohanes Ferry Cahaya
  • Rizki Yuniarti
  • Muhammad Rifaldi
  • Johan Hendri Prasetyo

Abstract

This study explores the dynamics of taxpayer compliance with motor vehicle taxes, shedding light on the intricacies of transport taxation. Focusing on the mediating role of taxpayer awareness, the research employs a quantitative approach with Likert scale measurements. Primary data is gathered from 300 respondents in Bekasi Regency, Indonesia, out of a population of 1,789,548 taxpayers, using accidental sampling. SEM-PLS analysis reveals that adherence to tax rules, system updates, understanding tax intricacies, higher incomes, and taxpayer awareness contribute significantly to enhanced tax compliance within the context of motor vehicle taxation. Notably, the study finds that public education about taxes does not significantly impact compliance in this specific domain. The factors influencing taxpayer awareness encompass tax rules, system upgrades, tax knowledge, public education, and income levels. While taxpayer awareness is linked to system upgrades, tax knowledge, public education, income levels, and compliance, it doesn’t connect with tax rules and compliance in the realm of motor vehicle taxation. The research implications provide valuable guidance specifically tailored to policymakers and tax authorities dealing with transport taxation. Emphasizing the significance of tax penalties, system modernization, and tailored taxpayer awareness programs can foster improved compliance in the motor vehicle taxation domain. Policymakers are urged to reassess the efficacy of tax socialization initiatives in the context of transport taxation, exploring alternative approaches for public tax education in this specific domain. Understanding the nuanced interplay among tax rules, system upgrades, tax knowledge, public education, income levels, taxpayer awareness, and compliance in the realm of motor vehicle taxation can inform targeted interventions for an overall enhancement of tax adherence in this specialized area.

Suggested Citation

  • Annathasia P. Erasashanti & Yohanes Ferry Cahaya & Rizki Yuniarti & Muhammad Rifaldi & Johan Hendri Prasetyo, 2024. "The Role of Taxpayer Awareness in Enhancing Vehicle Tax Compliance in Indonesia: An Attribution Theory Approach," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 10(1), pages 162-180.
    • Handle: RePEc:aiy:jnljtr:v:10:y:2024:i:1:p:162-180
    DOI: https://doi.org/10.15826/jtr.2024.10.1.163
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    More about this item

    Keywords

    taxpayer awareness; tax socialization; tax knowledge; tax system modernization; tax sanctions;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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