Individual Taxpayer Characteristics and Taxpayer Knowledge: Exploratory Survey on Individual Taxpayers in Bandung City, Indonesia

Headnote

ABSTRACT

This research tried to test an influence on individual taxpayer characteristics towards tax knowledge. This research presents a study about the effect of various individual characteristics, namely, gender, age, education level and income level towards tax knowledge. Data was collected using a 19-question set-list questionnaire. Quantitative exploratory approach was selected as research method. The population in this research is individual taxpayers working as employees in Bandung City. A sample of 100 taxpayers was selected using simple random sampling. The results were then analyzed using multiple regressions analysis. The result showed that tax knowledge level in Bandung's individual taxpayer is in 60,4% or classified as adequate. The results also showed that gender has no influence over tax knowledge, while age, education level, and income level have influence over tax knowledge. The overall model was condisered fit, with all independent variables explaining 18.3% of dependent variables.

Keywords: age, education level, gender, income level, tax knowledge.

(ProQuest: ... denotes formulae omitted.)

1. INTRODUCTION

Since 1983, Indonesian government has adopted the self-assesment system as its tax regime. Taxpayers are now obligated to calculate their own tax payable and submit tax returns that state the taxpayer calculations. There have also been several new procedures and regulations introduced in this era: tax payment, tax return submission, tax audit and tax litigation scheme. This tax system provides taxpayers with several obligations and rights, and taxpayers are assumed to understand and willing to oblige the tax rules and procedures.

Knowledge of taxpayers is essentially important, not only for taxpayers but also for citizens. Association of Chartered Certified Accountant - ACCA (2009) stated that the degree of interaction between taxation and operational decision making within a company provides an indication of the importance of tax knowledge to a company. But in contrast, ACCA (2009) also stated that only a small majority of corporate taxpayers (57%) in the United Kingdom agree that capturing internally generated tax knowledge is an important aspect of the tax function's role.

Generally, adequate tax knowledge is essential of making higher tax compliance (Oladipupo and Obazee, 2016). Tax authority always deems that tax understanding and knowledge is important. Since 2002, tax reform in Indonesia tries to strenghthen tax knowledge. In 2002, the tax office introduced "Account Representative", which functions...