Do motivational posture, audit random strategy, and ethical role have effect on tax compliance decision in Indonesia: An experimental study

Abstract

This study intends to investigate the impact of motivational postures, audit random strategy, and ethical role in tax compliance decision. This research was conducted in an environment where there was much tax fraud committed by tax officials.  This research method was conducted using the experimental method. This experiment using a 2x2x2 experimental design was carried out on undergraduate students at several Universities in East Java and West Java by providing a scenario to decide compliance with tax obligations. The results of this study indicate that the motivational posture play an important role on tax compliance decisions. A positive motivational posture will lead to increased decisions to comply. In addition, the strategy random audit also affects tax compliance decisions. A high level of random audits will also ensure a high level of vigilance for taxpayers. Finally, understanding tax ethics also affects tax compliance decisions.  In an environment where tax fraud is prevalent, understanding of tax ethics and the random audit strategy of the tax authority are not strong enough to increase tax compliance. Motivational posture play an important role in determining tax compliance decisions in any environment. Therefore, this study simultaneously examines taxpayers' behaviour from motivational posture, random audit strategy and understanding of tax ethics to tax compliance decisions. Motivation and ethics are individual behaviours that influence tax compliance decisions. Previous research on motivation and ethics on tax compliance decisions has been conducted using a questionnaire survey method. This research uses an experimental method to test the effect of motivation and ethics on tax compliance decisions. Thus, this research is able to directly capture the phenomenon of motivation and understanding of individual ethics on tax compliance decisions.