Tax compliance and social desirability bias of taxpayers experimental evidence from Indonesia Endra Iraman, Yoshikuni Ono and Makoto Kakinaka
By: Iraman, Endra
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Contributor(s): Ono, Yoshikuni | Kakinaka, Makoto.
Material type: 
ArticleSubject(s): EVASION FISCAL | FRAUDE FISCAL | CUMPLIMIENTO FISCAL | ASPECTOS SOCIALES | INDONESIA
In:
Journal of Public Policy v. 42, Issue 1, March 2022, p. 92-109Summary: Identifying taxpayers who engage in noncompliant behaviour is crucial for tax authorities to determine appropriate taxation schemes. However, because taxpayers have an incentive to conceal their true income, it is difficult for tax authorities to uncover such behaviour (social desirability bias). Our study mitigates the bias in responses to sensitive questions by employing the list experiment technique, which allows us to identify the characteristics of taxpayers who engage in tax evasion. Using a dataset obtained from a tax office in Jakarta, Indonesia, we conducted a computer-assisted telephone interviewing survey in 2019. Our results revealed that 13% of the taxpayers, old, male, corporate employees, and members of a certain ethnic group had reported lower income than their true income on their tax returns. These findings suggest that our research design can be a useful tool for understanding tax evasion and for developing effective taxation schemes that promote tax compliance.
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| Artículos | IEF | IEF | OP 1793/2022/1-1 (Browse shelf) | Available | OP 1793/2022/1-1 |
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| OP 1793/2021/3-1 Adjusting to austerity | OP 1793/2021/4 Journal of Public Policy | OP 1793/2022/1 Journal of Public Policy | OP 1793/2022/1-1 Tax compliance and social desirability bias of taxpayers | OP 1793/2022/2 Journal of Public Policy | OP 1793/2022/2-1 Direct democracy, coalition size and public spending | OP 1793/2022/2-2 Never let a serious crisis go to waste |
Resumen.
Identifying taxpayers who engage in noncompliant behaviour is crucial for tax authorities to determine appropriate taxation schemes. However, because taxpayers have an incentive to conceal their true income, it is difficult for tax authorities to uncover such behaviour (social desirability bias). Our study mitigates the bias in responses to sensitive questions by employing the list experiment technique, which allows us to identify the characteristics of taxpayers who engage in tax evasion. Using a dataset obtained from a tax office in Jakarta, Indonesia, we conducted a computer-assisted telephone interviewing survey in 2019. Our results revealed that 13% of the taxpayers, old, male, corporate employees, and members of a certain ethnic group had reported lower income than their true income on their tax returns. These findings suggest that our research design can be a useful tool for understanding tax evasion and for developing effective taxation schemes that promote tax compliance.
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