TAX REFORM AND NONCOMPLIANCE IN INDONESIA

The purpose of this paper is to examine the impact of Indonesia's tax reforms of 2000 and 2008/2009 on taxpayers' noncompliance. Noncompliance is defined as the difference between the Value Added Tax (VAT) liability and the actual revenue. Data are mainly collected from the World Input-Out...

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Bibliographic Details
Published in:Journal of Indonesian economy and business 2017-05, Vol.32 (2), p.87-103
Main Author: Iswahyudi, Heru
Format: Article
Language:English
Subjects:
Accounting records
Behavior
Compliance
Developing countries
Economic development
Economic models
GDP
Gross Domestic Product
Income redistribution
Income taxes
Indonesia
LDCs
Noncompliance
noncompliance
value added tax
tax administration
Indonesia
Reforms
Sales taxes
tax administration
Tax reform
Tax revenues
Taxation
Value added
value added tax
VAT
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Summary:The purpose of this paper is to examine the impact of Indonesia's tax reforms of 2000 and 2008/2009 on taxpayers' noncompliance. Noncompliance is defined as the difference between the Value Added Tax (VAT) liability and the actual revenue. Data are mainly collected from the World Input-Output Database and Indonesia's Central Board of Statistics. The methodology uses one of the 'top-down' approaches, in which national accounts figures are employed to arrive at an estimation of the VAT liability. It is found that compliance deteriorated when reform efforts were incomplete - that is when the reforms suffered from decelerations, setbacks or reversals. This paper contributes to the literature by providing a framework for analyzing the impact of tax reform on taxpayer's compliance behavior.
ISSN:2085-8272
2338-5847
DOI:10.22146/jieb.18153