The Importance of Nurturing Ethical Beliefs to Comply with Tax Obligations

Rini Hastuti; Shandy Jannifer Matitaputty

Rini Hastuti Soegijapranata Catholic University
Shandy Jannifer Matitaputty Soegijapranata Catholic University

Keywords: ethics, professional ethics course, tax compliance, self-assessment system

Abstract

The self-assessment system for taxpayers imposed in 1983 in Indonesia trusts taxpayers to calculate, pay, and report their own taxes in accordance to laws and regulations. Previous studies showed that tax understanding, regardless of depth, has influenced tax compliance. To help students, who would be future taxpayers, the taxation department of a university has encouraged students to take professional ethics courses to nurture ethical values.

The study sought to determine the influence of taking a professional ethics course to tax compliance. The study developed cases tested on two groups of students, where one group has a professional ethics course and the other has not. Sixty-eight students of the taxation department were selected. They underwent three cases. The first was on some ethical dilemma cases, the second on individual income tax cases, and the third; a reward variable was placed if they could minimize tax payables by not reporting certain revenues or by adding engineered expendable expenses.

Simultaneous regression test showed that the ethical values and professional ethics course significantly influenced tax compliance. Meanwhile, in partial regression, only professional ethics significantly influences tax compliance. The T-test showed that tax compliance under reward and no reward circumstances are different between the groups.

Author Biographies

Rini Hastuti, Soegijapranata Catholic University

Rini Hastuti is a Lecturer at Department of Taxation, Faculty of Economics and Business, Soegijapranata Catholic University, Semarang, Indonesia. She earned her Accounting Magister and Major in Public Sector Accounting in Gadjah Mada University, Yogyakarta, and Major in Accounting (Undergraduate) in Diponegoro University, Semarang. She teaches Basic Intermediate Accounting, Tax Accounting, and Taxation.

Shandy Jannifer Matitaputty, Soegijapranata Catholic University

Shandy Jannifer Matitaputty is a full-time lecturer of the Faculty of Economic and Business at Soegijapranata Catholic University, Semarang, Indonesia, since 2014. Previously she was a Research Assistant at the Institute for Research and Community Services (LPPM) Universitas Diponegoro as Research Assistant. Her field of interests are economic development, poverty, and taxes, on which she has published various articles. Currently, she is involved in research in poverty field collaboration with the East Asian Development Network (EADN).