The Impact of Tax Knowledge, Tax Morale, Tax

Volunteer on Tax Compliance

Abstract —This study analyzes tax knowledge , tax morality , tax
volunteers as well as tax compliance with the aim of measuring
the influence of tax knowledge , tax moral and tax volunteers
against tax compliance . The role of tax volunteers is important in
tax understanding to increase tax compliance . Using the Slovin
formula, the number of samples were taken as much as 100 samples
of the total population in which there are 63 ,099 individual
taxpayers . A Likert scale of 1 (strongly disagree ) to 5 (strongly
agree) was used as the study questionnaire . The test was conducted
by using Partial Least Square (Smart PLS). This study showed that
taxpayer compliance was significantly affected by tax knowledge ,
tax moral and tax volunteers . Given the importance of tax
volunteer factors in increasing tax understanding and tax
compliance , so the role of tax volunteers is indispensable . Tax
moral is also an important factor that improves tax compliance .
These meaningful results are really helpful in order to
understand more about the challenges of taxpayer compliance
improvement . These results also provide advanced stuffy on
different tax subjects , in addition to the theoretical and social
relevance , as well as the fact that study related to moral and tax
volunteers is still very little.
Keywords—tax knowledge, tax moral, tax volunteer, tax
compliance
I. INTRODUCTION
Taxes plays an important role in the national economy. Therefore ,
it is necessary to raise citizen awareness about the importance of tax
understanding. By increasing the tax awareness, taxpayer compliance is
expected to be increased . The voluntary compliance of taxpayers (
voluntary compliance) is crucial in the taxation system. Compliance has
been achieved more on preventive methods through law enforcement ,
such as tax checks and sanctions that are based on the assumption that
the taxpayer will only be obedient if there is a force [1,2].
In the Self -assessment system , the Government through the
Directorate General of Taxation uses more voluntary compliance
approaches (voluntary compliance ). The Self- Assessment System (
SAS) implementation requires the taxpayers have a good understanding
of taxation rules. The system requires taxpayers to calculate, pay for, and
report their own taxation obligations. Responsibility is solely at the

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taxpayer 's own discretion . If there is an error in the performance of
its obligations, the taxpayer will be subject to sanctions.
Community knowledge and awareness factors are one of the causes of
low public compliance to pay tax [3-6]. Another factor that also affects
the lack of taxpayer compliance is the moral taxpayers [7,8]. To increase
the taxpayer compliance , the Directorate General of Taxation (DGT )
involves non -authority communities in a program called tax
volunteers . The contributions of academics who care about the fate
of Indonesian nation and state in collaboration with DGT gives an
understanding of taxes to increase public awareness in carrying out their
tax obligations . The cooperation is realized by forming a tax center
that houses and ensures the tax volunteer work program runs well
annually . In addition to taxpayer awareness , tax moral , trust in the
government , belief in the legal system , government performance , and
social and cultural norms are factors that are believed to affect
taxpayer compliance as well [9]. A high tax moral is required from
taxpayers to achieve a high level of tax compliance . The results of the
study linking morality of taxpayers to taxpayer compliance showed a
positive relationship between tax morale and tax compliance , i.e. the
higher intrinsic motivation to pay taxes, the higher the tax compliance [
10-13].
Based on the description in the background , the main problem is
how the influence of tax knowledge , taxpayers moral and the tax
volunteers against taxpayer compliance.
 There is a significant influence between the understanding of
taxpayers with the level of tax compliance . The better the
taxpayer 's understanding of taxation , the higher the level of
taxpayer compliance . Taxpayer compliance in carrying out their
tax obligations is affected by the level of education and
understanding of taxpayers about the tax itself.
 There is a moral influence of taxpayers on taxpayer compliance. The
moral reasoning theory can be used to explain the moral influence
of taxpayers on taxpayers compliance.
 Advances in Social Science, Education and Humanities Research, volume 544

 There is an influence of tax volunteers on taxpayer compliance . There

is a role in tax volunteers in increasing taxpayer understanding of
taxpayer compliance.
II. LITERATURE REVIEW
A. Tax Volunteers, Tax Knowledge and Taxation Awareness Tax volunteer is
a community in which studying tax and
mentoring tax reporting to taxpayers. VITA (Volunteer Income Tax Assistance
) and TCE (Tax Counseling for the Elderly ) are volunteers who are tasked to
assist people in fulfilling their exposure rights and obligations , especially the
filing of annual tax report via E-filing [14]. Gary Iskowitz of California State
University Northridge has introduced VITA and TCE since 1971. In Canada
the community is known as the Community Volunteer Income Tax Program (
CVITP) which provides wider service activities even to tax returns for eligible
taxpayers [15].
The role of tax volunteer is important to increase taxpayer compliance . Tax
volunteers can take one of the roles of assistance given: The Tax Preparer ,
the Quality Reviewer , and the Tax Coach . As a tax preparer , tax volunteers
have to obtain counting training and tax reporting , including the use of
electronic filing software , as well as preparing restitution /refund of excess
tax payments. The tax volunteers must have experience as a tax preparer to
become quality reviewer . As quality reviewer , tax volunteers must have a tax
consultant certificate . As a tax coach , tax volunteers assist with tax payment
mentoring , tax reporting and tax returns including those which related to tax
law issues. A tax coach must have a taxpayer certificate.
Another important factor that affects taxpayer compliance is tax knowledge.
Tax knowledge can lead to unbelief and negative attitudes toward tax. While
good tax knowledge is positively correlated with taxpayer attitudes and
taxpayer compliance [6]. Eriksen and Fallan stated that when the level of
knowledge of the tax increases , the rate of decline of tax evasion and tax
compliance levels to be much higher [16].
Tax justice also affects tax compliance . Hofmann , et al stated that justice
relates to the perception of justice for tax paid and compensation received by
the public for the tax payable, and the perceived fairness of the procedure
formulated , as well as the consequences of violations of the tax rules [9]. In
connection with the taxpayer 's conduct , Wenzel stated that included in tax
justice were: distributive justice, procedural justice and retributive justice [16,
17].
Tax knowledge is an important element in the tax system with a self -
assessment, especially in determining the amount of tax obligations accurately
[18]. Without sufficient tax knowledge, there is a tendency for taxpayers not to
obey the taxation legislation either intentionally or unintentionally . Small
business taxpayers are even less likely to be aware of the lack of their tax
knowledge and this become one of the causes of accidental disobedient
behavior. Fallan who confirms the
results of the study Schisler. Tax knowledge can significantly change attitudes
towards the justice of the taxation system [18].
Tax knowledge and taxpayer awareness will affect taxpayer 's attitudes
and obligations. The lack of understanding of taxation regulations and how the
implementation of these regulations will affect taxpayer 's compliance [19].
The higher the taxpayer's knowledge and awareness on the tax regulation, the
higher the taxpayer 's value of compliance [20-23]. Another factors that can
affect tax knowledge and compliance behaviour are the level of education,
the exposure to tax education, the knowledge of e-filing and the Complexity
of tax law [6,23]. The understanding of e-filing and the complexity of tax law
will affect taxpayer’s behaviour.
B. Tax Moral
The tax moral concept was introduced for the first time in 1960, s but still
little attention was given by tax researchers for decades. Starting in 1990, tax
moral has attracted more attention and has become a central issue in
empirical study on compliance.
Tax moral is very important and integral attitude that impacts on tax
compliance . Tax moral is defined as intrinsic motivation to pay tax [7,10,12].
Luther and Singhal define tax moral as the totality of non -monetary
motivation and factors for tax compliance that is beyond the maximization of
expected utilities [24]. The relationship between education and tax moral has
been discussed by Torgler . He expect that education affects the tax
compliance behavior of the more highly educated citizens because they may
have a better aware of welfare state benefits and government wastes [25].
Kornhauser develop the theory and concept of tax moral . This concept
considers tax moral research in three key areas : cognitive and affective
processes (e.g. Kahan and Braman , Cullis et al., Hansen), social norms and
personal values/norms (e.g. Kolstad,; Fehr and Fischbacher,; Mazar and Ariely
,) and demographic factors (e.g. McGee and Tyler,; Togler; Hasseldine and
Hite,) [7,12]. Personal nature is also important in shaping the individual tax
morals that affect tax compliance behaviour. Previous studies show that there
are individuals , who are referred as "honest taxpayers ", who do not try to
dodge because they are only "inclined not to avoid" [26]. On the other hand, "
tax evasion " in general , has low tax moral and acts as a rational individual
comparing the benefits of avoiding tax with benefits of compliance . In
addition, there are individuals who can enjoy avoiding taxes and consider this
as a game [24 ]. These studies emphasize more on relevance in
understanding the level of obedience that should be met. A high tax moral is
required from taxpayers to be able to achieve a high level of tax compliance .
Some studies have shown that there are moral influences of taxpayers to
taxpayer compliance [10,12,13,27]. High moral levels will affect taxpayers’
compliance. Taxpayers who have a high moral level tend to be more obedient
than taxpayers who are at a low moral level. Tax moral is also associated with
domestic tax evasion. A low tax moral will result in domestic tax evasion [28].
 Advances in Social Science, Education and Humanities Research, volume 544

C. The Taxpayer's Compliance

The taxpayer 's compliance is defined as entering and reporting the
required information in time, filling in the correct amount of the tax payable,
and paying the tax in time, without any act of compulsion [29]. Disobedience
arise if one of the conditions of definition is not met. Taxpayer compliance
can be divided into two, namely voluntary compliance and direct enforcement.
Voluntary tax compliance is key to the success of the taxation system .
Taxpayers are responsible in establishing their own tax obligations and then
paying and reporting tax in time. There are two kinds of adherence to: 1)
Material compliance, a situation where the substantive taxpayer/essence meets
all material taxation provisions, namely according to the content and the legal
souls of the tax. 2) Formal compliance, A situation where taxpayers carry out
tax obligations formally in accordance with the provisions of taxation law [30
].
A tax system with Self-Assessment System, emphasis on the importance of
voluntary compliance . The theory of tax compliance is mostly referred to
behavioral theories . One theory of behaviour used was Theory of
Reasoned Action [29,31].
In the case of unbelief in the tax authorities , high authority power is
required to enforce tax compliance and increase fines as well as the possibility
of auditing may be an effective tax policy . However , in conditions where
taxpayers trust government authorities, other variables become important [32].
Knowledge , attitude , moral appeal , justice and democracy can lead to
voluntary obedience . High fines and checks made against taxpayers may
affect taxpayer compliance and will undermine the moral of the taxpayer .
Such influence would inadvertently undermine the moral taxpayers [33].
The taxpayer 's compliance behaviour can be classified into four groups
depicted in the form of a pyramid of compliance models adopting a series of
values, beliefs, and attitudes that can be described as motivational posture.
This motivation posture has two generally disobedient behaviors and two
obedient behaviors that characterize the individual ways of dealing with the
Revenue authority and its managed tax system [34,35].
The OECD states that the more the pyramids move upward, the taxpayer 's
number of the compliance behaviour is less . In contrast , the cost of tax
compliance will be decreased as the pressure to be obedient when the pyramid
moves downwards . Implicitly , the taxpayer's compliance has a connection to
the pressure and cost of tax compliance paid to reach a particular level of
compliance.
III. RESEARCH METHODS
The purpose of this study is to understand the influence of taxation
knowledge, moral taxpayers and tax volunteers against taxpayer compliance in
carrying out their tax obligations.
This is an explanatory to study the relationship between variables. The data
used in this study is primary data that is obtained through the questionnaire .
The total tax-payer
population registered in KPP Pratama Badung Selatan in 2018 is 63,
099. The sample count is determined its using the Slovin formula and
its obtained 100 samples . Variable measurements using Likert scale,
from 1 (strongly disagree) to 5 (strongly agree). Taxpayer compliance
(Y) as dependent variable , Tax Knowledge (X1) as an independent
variable , Tax Moral (X2) as an independent variable and Tax
Volunteer (X3) as an intervening variable . Data analysis was
conducted by using Partial Least Square. Quantitative data analysis
is also supported with descriptive analysis to collaborate the analysis
results, so that a valid conclusion is obtained.
Research Hypothesis:
H1: Taxpayer knowledge on taxation regulations affects taxpayer
compliance.
H2: Tax moral affects taxpayer compliance.
H3: Tax volunteers affects tax compliance.
H4: Taxpayer knowledge affects tax compliance through tax
volunteers.
IV. RESULTS AND DISCUSSION
A. Research Variables Description
The taxpayer understands well about the functioning of the tax as
one of the state Revenue Sources (X1.6) with mean value of 4.280.
Taxpayers realize that tax function as a state income source to finance
development . But taxpayers are less likely to be able to self-calculate
their tax obligations (X1.2) with mean value of 3.880. This indicates
that not all taxpayers self-calculate their exposure obligations . X 1.2.
Gets the lowest mean value compared to the other items , but still
resides in very good categories.
In relation to tax moral , taxpayers will report a full major income
including any other small income in his tax report form (X 2.2) but not
fully report revenue from investments (X 2.4). The value of X 2.2
indicates the highest mean value of 4.280 and the X 2.4 represents the
lowest mean value of 3.980.
Taxpayers are greatly assisted by the tax volunteers who assist in
the online annual tax reporting (X 3.4) with the highest mean value of
4.550 and the taxpayer is greatly assisted by the tax volunteers who
help explain the rights and liabilities of his tax (X 3.1) with the lowest
mean value of 4.190.
Taxpayers have awareness of registering as taxpayers to obtain a
NPWP (Y 2.1) with the highest mean value of 4.310 . However , in
case of calculating a tax owed , taxpayers are not always able to
calculate correctly (Y 2.4) with mean value of 4.100. This indicates
that sometimes an error occurs when the taxpayer calculates the
outstanding tax. (Y 2.4) gets the lowest mean value compared to other
items, but still remains in the high category.
 Advances in Social Science, Education and Humanities Research, volume 544

B. Evaluation of the Measurement Model (Outer Model) Convergent validity,

linear validity and reliability tests
showed the results as required . Convergent validity shows loading factor
above 0.50 , linear validity declare valid results and Cronbach 's alpha and
composite reliability delivers reliable results.
C. Evaluation of Structural Model (Inner Model)
Values R-Squares 0.75 (strong ), 0.50 (moderate ), and 0.25 (weak ). The
higher the R2 value, the better the predictive model of the proposed research
model. Based on these results, it can be concluded that the tax knowledge (X
1), taxpayer moral (X2) and tax Volunteers (X3) has an influence of 63.9% or it
can be called strong enough.
D. Hypothesis Test
The significant rate used is 5% with a T-statistic value of 1.96 . The T-
Statistic value > 1.96 indicates that the hypothesis was accepted , whereas if
the T-statistic value of < 1.96 indicates the hypothesis was rejected . The
results of the hypothesis testing on this study were a direct influence , indirect
influence and total impact, as follows: a) Direct influence of results shows that
moral tax (X2) and tax Volunteers (X3) have a direct positive and significant
influence on their tax compliance of 0.433 and 0.380 respectively , tax
knowledge (X1) against tax volunteer (X2) has a positive and significant direct
influence of 0.873, while tax knowledge (X1) against tax compliance (Y) has an
insignificant positive influence of 0.032. b) Indirect influence of tax knowledge
(X1) on tax compliance (Y) through tax volunteer (X3) generates a coefficient
of 0.332 with a significance value of 0.006 which demonstrates the positive
and significant influence of tax knowledge on tax compliance through tax
volunteer. c) The Total influence of the results showed that the tax moral (X2
) has a positive and significant influence on tax compliance (Y) of 0.433,
tax knowledge (X1) has a positive and significant influence on tax compliance (
Y) of 0.364, tax knowledge (X1) has a positive and significant influence of 0.
873 on tax volunteers (X3), as well as tax volunteers (X3) has a significant
positive influence of 0.380 on tax compliance (Y).
E. Discussion of Research Results
In this discussion, the study was conducted to answer the problems proposed
and subsequently based on the results of the significance test will be able to
answer whether the proposed hypothesis was accepted or rejected in
accordance with existing data support and theoretical studies. What the results
mean and why it happened will be more discussed later , as well as how its
relevance to the theories and previous studies.
Based on the estimate of structural model parameters obtained tax
knowledge line coefficient value significant effect on taxpayer compliance of 0.
364. These results answered the number one research hypothesis. The results of
this study are in line with previous studies by Newman and Nokhu [6] and
Eriksen & Fallan [16]. These results are also in line with
previous studies stating that the higher the knowledge and
awareness of tax laws , the higher the taxpayer 's value of
compliance [20 -22 ]. Tax knowledge is an important factor in
determining the amount of tax obligations accurately in the tax system
with the self Assessment [18]. The understanding of e- filing and the
complexity of tax law also affects the behavior of tax compliance. The
level of education, tax understanding, is also another factor that affects
tax compliance [6,23 ]. Results from the study found that tax
knowledge has significant effect on tax compliance . This is related
to the understanding of taxpayers on taxation regulations and
understanding of e-filing as a means of tax reporting.
The results showed that tax moral significantly affects the taxpayer's
compliance with a coefficient value of 0.433. These results were in
line with Luttmer 's & Singhal Findings , Kemme , Parikh , &
Steigner , Cummings , Martinez -Vazquez , McKee , & Torgler [13].
The personal nature that constitutes the individual 's moral taxpayers
will affect tax compliance . Honest taxpayers will not try to dodge ,
whereas taxpayers who have a low tax moral would tend to dodge tax
payments . This corresponds to the Theory of moral reasoning [36].
The results of this study showed that taxpayers have good moral (
honest) so tend to be obedient to pay taxes. Good moral is believed to
be in correlation with high religious level of society . Employee
taxpayers are more compliant than entrepreneurs ' taxpayers . This is
due to the income the taxpayer has obtained the employees of the
job is already done cutting by the employer so there is no gap to avoid
tax payments.
The results showed that tax volunteers had a significant influence
on the taxpayer ’s compliance of 0.380. The importance of a tax
volunteer role in increasing taxpayer compliance is as a tax preparer.
The role of the tax preparer is to assist taxpayers in calculating the
amount of tax owed, report the annual tax report by e-filing or e-form.
This is in line with one of the roles of volunteer taxes in the United
States (VITA) that tax volunteers help people fulfill their tax rights
and obligations especially for the annual tax report charging
assistance via e-Filing [14].
The results showed that tax knowledge has significant effect on
tax compliance through tax volunteers of 0.332. In the case of a tax
community that lacks of knowledge about tax , the role of tax
volunteers will be very helpful in increasing taxpayer’s compliance.
Tax volunteers increase the influence of tax knowledge on taxpayer’s
compliance. The existence of tax volunteers can assist in calculating
taxes , preparing tax payments and annual tax reporting . The role of
tax volunteers is essential for increasing taxpayer understanding of
taxation rules, so that socialization and volunteer tax activities should
be done regularly.
 V. CONCLUSION AND SUGGESTION

A. Conclusion
Based on the study results regarding the influence of taxpayers ’
knowledge , the moral taxpayers and the tax volunteers against
taxpayer compliance, it can be concluded:
 The results show that tax knowledge has a significant positive effect
on tax compliance . It means that an increased in taxpayer
knowledge will increase taxpayer compliance.
 Based on the field study and study analysis, it can be stated that the
moral taxpayers have a positive and significant effect on the
taxpayer 's compliance . It means that a moral tax is required to
comply with tax regulation , then payment compliance and tax
reporting will increase.
 The results showed that the role of tax volunteers was crucial for
increasing taxpayers ' compliance . Tax volunteers can increase
the taxpayer 's understanding in relation to tax regulation so that
taxpayer compliance will also be increased.
B. Suggestions
 In the self-assessment system that gives the taxpayer confidence to
register , calculate , pay and report his /her tax obligations , the
knowledge of tax regulation is very important . Therefore , the role
of the Directorate General of Taxation in increasing understanding
is indispensable through the socialization of tax regulation . Tax
volunteers can help the Directorate General of Taxation to conduct
this socialization . Besides , it needs to be improved tax inclusion
activities, especially in colleges.
 Trust to the government and tax authorities greatly affects the
moral taxpayers. It takes a way to motivate taxpayers. One of them
is in the form of socializing the optimal tax understanding to the
community. This affects the public to pay tax voluntarily.
 The Directorate General of Taxation regularly and continuously
must provide training to staff. Staff can communicate and provide
good service to taxpayers , thereby increasing satisfaction and
trust to the Directorate General of Taxation.
 It needs to be done advanced research related to other factors that
affect tax compliance beyond the knowledge , moral and tax
volunteers, so that tax compliance can be increased.
ACKNOWLEDGMENT
The author would like to thank the State Polytechnic of Bali for
permission to use its facilities for research.