The effect of taxpayer compliance, negotiation tendency, tax morale, and earnings management towards voluntary tax compliance mediated by perceptions of the fiscal policy

This study aimed to analyze the effect of taxpayer compliance, negotiation tendency, tax morale, and earnings management on voluntary tax compliance and the mediating effect played by perceptions on fiscal policy. The population was MSMEs in Surabaya as taxpayers. Our sample involved 260 respondents selected through a purposive sampling method. Questionnaires were distributed as the research instrument. Data collected were analyzed using SEM Warp PLS 6.0. The results showed that Taxpayer Compliance (TC), Negotiation Tendency (NT), and Earnings Management (EM) had a positive effect on voluntary tax compliance, but Tax Morale (TM) had a negative effect on voluntary tax compliance. Tax Compliance (TC), Negotiation Tendency (NT), and Earnings Management (EM) mediated by perceptions on Fiscal Policy (PFP) had a positive effect on voluntary tax compliance, while Tax Morale (TM) mediated by fiscal policy had a negative effect on voluntary tax compliance. The novelty of our study was on the finding that taxpayer compliance was influenced by the behavior of taxpayers themselves—the behavior was seen from economic and financial conditions using a fiscal policy approach and conceptual approach based on a developing view of the tax policy—and was not determined by regulations.