Title:
THE EFFECT OF ETHNICITY ON TAX COMPLIANCE OF SMALL MEDIUM ENTERPRISE IN INDONESIA: TRUST AS INTERVENING VARIABLE

Authors:
Lusi Prihatiningtyas, Evans Sembada, Ari Kuncara Widagdo, Wahyu Widarjo, Indonesia

Abstract:

The purpose of this study is to examine the relationship of ethnicity with tax compliance with trust as a moderating variable. Besides, this study also examines other variables that have existed in previous studies, namely tax justice and communication. This study employs survey by distributing questionnaires. This study uses a smart PLS analysis to analyze data. The results of this study indicate that tax justice and communication have significant relation with tax compliance. In contrast, ethnicity does not related to both trust and tax compliance. Besides, the results indicate that trust does not serve as an intervening variable. It implies that the Indonesian government needs to improve the tax justice issue related to SMEs tax and continue to communicate to SMEs taxpayer.