Quality of public governance and voluntary tax payment: experimental evidence from Indonesia

Dwi Krisnanto*, Endra Iraman, Yoshikuni Ono, Makoto Kakinaka

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Taxpayers tend to have an aversion to taxes because they often feel that they lack information about how their taxes are being spent. By conducting a vignette survey experiment with the Indonesian taxpayers, we demonstrate that citizens are more likely to perceive their tax obligations favourably if they are exposed to information that the government is acting in a trustworthy manner. This result suggests that a government’s commitment to establishing good governance in tax revenue management can increase public confidence, which can be an important determinant of people’s tax attitudes. Our study provides new empirical evidence on the impact of psychological ties between citizens and the government on citizens’ willingness to pay taxes.

Original languageEnglish
JournalApplied Economics Letters
DOIs
Publication statusAccepted/In press - 2021

Keywords

  • public governance
  • survey experiment
  • Tax paying behaviours
  • willingness to pay tax

ASJC Scopus subject areas

  • Economics and Econometrics

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