When Fear Outweighs Knowledge: Tax Sanctions, Government Service, and Tax Compliance among Savings and Loan Cooperatives
DOI:
https://doi.org/10.61656/pmar.v7i2.268Keywords:
inflation, number of small business units, rural general credit, third-party fundsAbstract
Purpose: This study examines whether taxpayer understanding, perceived tax sanctions, and government service influence the tax compliance of savings and loan cooperatives in Bojonegoro, Indonesia, and which of the three factors has the dominant influence under a self-assessment system.
Method: A cross-sectional survey was administered to managers of savings and loan cooperatives drawn by simple random sampling from 79 registered corporate taxpayers. Of 65 questionnaires distributed, 40 were usable, a response rate of 61.5 percent. After item cleaning, the instrument retained 32 of 37 items and all scales were reliable. The data were analyzed with multiple linear regression, F-and t-tests, and standardized coefficients.
Findings: The three variables influence compliance. Perceived tax sanctions and government service have significant effects, whereas taxpayer understanding does not. Perceived sanctions are the dominant factor, so the expectation that understanding dominates is not supported.
Implications: Tax offices should combine credible and consistent enforcement with wider supervisory and service contact for small taxpayers. Understanding appears to work together with the perception of sanctions, so education should be paired with visible enforcement and with better bookkeeping capacity in cooperatives.
Originality: The study offers rare evidence on cooperatives as taxpayers, compares the relative strength of understanding, sanctions, and service in one model, and documents in detail how item-level purification shaped the final measurement model.
Downloads
References
Adem, M., & Jerene, W. (2026). Beyond deterrence: Trust, tax morale and tax compliance dynamics in Ethiopia. Meditari Accountancy Research, 34(3), 585–604. https://doi.org/10.1108/medar-09-2025-3265
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3–4), 323–338. https://doi.org/10.1016/0047-2727(72)90010-2
Alm, J. (2019). What motivates tax compliance?. Journal of Economic Surveys, 33(2), 353–388. https://doi.org/10.1111/joes.12272
Alm, J., & Malézieux, A. (2021). 40 years of tax evasion games: A meta-analysis. Experimental Economics, 24(3), 699–750. https://doi.org/10.1007/s10683-020-09679-3
Alshira’h, A. F., Al-Shatnawi, H. M., Al-Okaily, M., Lutfi, A., & Alshirah, M. H. (2020). Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence. EuroMed Journal of Business, 16(4), 431–455. https://doi.org/10.1108/EMJB-01-2020-0004
Appiah, T., Domeher, D., & Agana, J. A. (2024). Tax knowledge, trust in government, and voluntary tax compliance: Insights from an emerging economy. Sage Open, 14(2), Article 21582440241234757. https://doi.org/10.1177/21582440241234757
Bandura, A. (2001). Social cognitive theory: An agentic perspective. Annual Review of Psychology, 52(1), 1–26. https://doi.org/10.1146/annurev.psych.52.1.1
Bott, K. M., Cappelen, A. W., Sørensen, E. Ø., & Tungodden, B. (2020). You’ve got mail: A randomized field experiment on tax evasion. Management Science, 66(7), 2801–2819. https://doi.org/10.1287/mnsc.2019.3390
Cialdini, R. B., & Goldstein, N. J. (2004). Social influence: Compliance and conformity. Annual Review of Psychology, 55(1), 591–621. https://doi.org/10.1146/annurev.psych.55.090902.142015
Cranor, T., Goldin, J., Homonoff, T., & Moore, L. (2020). Communicating tax penalties to delinquent taxpayers: Evidence from a field experiment. National Tax Journal, 73(2), 331–360. https://doi.org/10.17310/ntj.2020.2.02
Dwenger, N., Kleven, H., Rasul, I., & Rincke, J. (2016). Extrinsic and intrinsic motivations for tax compliance: Evidence from a field experiment in Germany. American Economic Journal: Economic Policy, 8(3), 203–232. https://doi.org/10.1257/pol.20150083
Gangl, K., Hofmann, E., Hartl, B., & Berkics, M. (2020). The impact of powerful authorities and trustful taxpayers: Evidence for the extended slippery slope framework from Austria, Finland, and Hungary. Policy Studies, 41(1), 98–111. https://doi.org/10.1080/01442872.2019.1577375
Gangl, K., Torgler, B., & Kirchler, E. (2016). Patriotism’s impact on cooperation with the state: An experimental study on tax compliance. Political Psychology, 37(6), 867–881. https://doi.org/10.1111/pops.12294
Gemmell, N., & Ratto, M. (2018). The effects of penalty information on tax compliance: Evidence from a New Zealand field experiment. National Tax Journal, 71(3), 547–588. https://doi.org/10.17310/ntj.2018.3.05
Hallsworth, M., List, J. A., Metcalfe, R. D., & Vlaev, I. (2017). The behavioralist as tax collector: Using natural field experiments to enhance tax compliance. Journal of Public Economics, 148, 14–31. https://doi.org/10.1016/j.jpubeco.2017.02.003
Kasper, M., & Alm, J. (2022). Audits, audit effectiveness, and post-audit tax compliance. Journal of Economic Behavior & Organization, 195, 87–102. https://doi.org/10.1016/j.jebo.2022.01.003
Kelley, H. H. (1973). The processes of causal attribution. American Psychologist, 28(2), 107–128. https://doi.org/10.1037/h0034225
Khozen, I., & Setyowati, M. S. (2023). Managing taxpayer compliance: Reflections on the drivers of willingness to pay taxes in times of crisis. Cogent Business & Management, 10(2), Article 2218176. https://doi.org/10.1080/23311975.2023.2218176
Kim, J. H. (2019). Multicollinearity and misleading statistical results. Korean Journal of Anesthesiology, 72(6), 558–569. https://doi.org/10.4097/kja.19087
Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The “slippery slope” framework. Journal of Economic Psychology, 29(2), 210–225. https://doi.org/10.1016/j.joep.2007.05.004
Manrejo, S., & Yulaeli, T. (2022). Tax compliance model based on taxpayers planned behavior in Indonesia. Journal of Tax Reform, 8(3), 298–311. https://doi.org/10.15826/jtr.2022.8.3.123
Mascagni, G. (2018). From the lab to the field: A review of tax experiments. Journal of Economic Surveys, 32(2), 273–301. https://doi.org/10.1111/joes.12201
Musimenta, D., Nkundabanyanga, S. K., Muhwezi, M., Akankunda, B., & Nalukenge, I. (2017). Tax compliance of small and medium enterprises: A developing country perspective. Journal of Financial Regulation and Compliance, 25(2), 149–175. https://doi.org/10.1108/jfrc-08-2016-0065
Nasution, M. K., Santi, F., Husaini, H., Fadli, F., & Pirzada, K. (2020). Determinants of tax compliance: A study on individual taxpayers in Indonesia. Entrepreneurship and Sustainability Issues, 8(2), 1401–1418. https://doi.org/10.9770/jesi.2020.8.2(82)
Okunogbe, O., & Pouliquen, V. (2022). Technology, taxation, and corruption: Evidence from the introduction of electronic tax filing. American Economic Journal: Economic Policy, 14(1), 341–372. https://doi.org/10.1257/pol.20200123
Okunogbe, O., & Santoro, F. (2023). Increasing tax collection in African countries: The role of information technology. Journal of African Economies, 32(Supplement_1), i57–i83. https://doi.org/10.1093/jae/ejac036
Oladipupo, A. O., & Obazee, U. (2016). Tax knowledge, penalties and tax compliance in small and medium scale enterprises in Nigeria. iBusiness, 8(1), 1–9. https://doi.org/10.4236/ib.2016.81001
Ratnawati, V., Rusli, R., & Wahyuni, N. (2023). Determinants of tax compliance of micro, small, and medium enterprises (MSMEs) in Pekanbaru, Indonesia. Problems and Perspectives in Management, 21(3), 601–613. https://doi.org/10.21511/ppm.21(3).2023.47
Schober, P., Boer, C., & Schwarte, L. A. (2018). Correlation coefficients: Appropriate use and interpretation. Anesthesia & Analgesia, 126(5), 1763–1768. https://doi.org/10.1213/ANE.0000000000002864
Sisay, M. A., & Mayburov, I. A. (2026). Behavioral interventions and SME tax compliance: Evidence from a field experiment in Ethiopia. Journal of Tax Reform, 12(2), 399–416. https://doi.org/10.15826/jtr.2026.12.2.257
Slemrod, J. (2019). Tax compliance and enforcement. Journal of Economic Literature, 57(4), 904–954. https://doi.org/10.1257/jel.20181437
Swistak, A. (2016). Tax penalties in SME tax compliance. Financial Theory and Practice, 40(1), 129–147. https://doi.org/10.3326/fintp.40.1.4
Taber, K. S. (2018). The use of Cronbach’s alpha when developing and reporting research instruments in science education. Research in Science Education, 48(6), 1273–1296. https://doi.org/10.1007/s11165-016-9602-2
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Suci Wahyuningsih, Retno Muslinawati
This work is licensed under a Creative Commons Attribution 4.0 International License.
