Tax Compliance in the Context of Amnesty: Does Tax Socialization Make a Difference?

Abstract

This study aims to examine the effect of the tax amnesty program on motor vehicle taxpayer compliance by considering the role of tax socialization as a moderating variable. Taxpayer compliance is an important factor in increasing regional tax revenues, so understanding the factors that influence it is essential. The data used in this study are primary data obtained through distributing questionnaires to motor vehicle taxpayers in the study area. The analysis methods used include Partial Least Squares Structural Equation Modelling (PLS-SEM) with Smart PLS to examine differences between groups as well as to simultaneously test the relationships among variables within the structural model. The results of the study indicate that the tax amnesty program has a positive and significant effect on taxpayer compliance. This indicates that the tax amnesty program that provides relief in the form of elimination of fines and administrative sanctions is able to encourage taxpayers to be more compliant in fulfilling their tax obligations. However, the results of the analysis also show that tax socialization does not act as a significant moderating variable in the relationship between the tax cleanliness program and taxpayer compliance. In other words, the level of tax socialization does not change the effect of the tax amnesty program on taxpayer compliance. In addition, the Normed Fit Index (NFI) value of 0.595 which is close to the value of 1 according to the Rule of Thumb indicates that this research model has a good fit with the data used. This finding gives the impression that the tax amnesty program can be used as an effective strategy to increase the fulfilment of motor vehicle taxpayers, while the role of tax socialization needs to be studied further in order to provide a more optimal impact.