The Optimum Level of Tax Compliance Based on Power of Authority and Trust in an Antagonistic Climate

Wiwiek Prihandini
European Research Studies Journal, Volume XXI, Issue 1, 362-373, 2018
DOI: 10.35808/ersj/954


This study aims to determine the optimum level of tax compliance. The optimum level is used for evaluation of tax compliance at one time period. Power of auhtority dan trust in authority are applied to explain tax compliancel based on Sliperry slope framework.This research used tax report that presented in the financial statements. All data processed from 105 companies listed in the Indonesian capital market during 2007 - 2015. Power of authority is measured by probability audit and fines, while appeal to the tax court for trust in authority, and ratio tax burde to income before tax for tax compliance.The optimum point is performed by first differential function of Tax compliance on Power of Authority and Trust in Authority. The result tax compliance is below the optimum level, power of authority and trus in authority are above the optimum level.Increased tax compliance is conducted through inspection procedures effectively, the determination of fair fines, and the use of administrative systems based on technology that can be accessed by taxpayers. Tax authority should be able to change from antagonistic climate into synergetic climate.

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