Public Administration Concern for Social Values, Can it Improve Tax Compliance? (Tax Office Studies in Indonesia)

This paper examines a public administration perspective using social value as well as nonmonetary incentives to engage SMEs and step from the research question whether they will increase voluntary tax compliance as returns. The current tax socialization is no longer just a model for submitting tax articles to raise more money, or focuses specifically on explaining why tax obligations must be paid, sanction or penalties. The mission of public institutions as educators has been adopted by Directorate General of Taxes, instilling a sense of trust between the government and society, the social value focal point approach of taxation and citizenship that aims to foster a commitment to become citizens with noble character. SMEs tend to hide from tax obligations in accordance with the character of cash transactions, do not have business licenses, do not have a fixed address, and are also difficult to trace on the national administrative data network. Their obligation to pay taxes is only 0.5% of turnover, ironically, taxation socialization events just to inform people are less enthusiastic about being attended. The Indonesian Directorate General of Taxes launched a new model of tax socialization by combining training services for business development. This study found social norms as compliant citizens were sewn into each of these events. The new model of tax outreach has been found to be a magnet for SMEs to be pulled out of places tax offices find it hard to find. So far, however, their concern for taxes as a reciprocal form of obedience to the state is still low. This indicates that the distinctive role of public administration in the form of an enforcement system from the tax office is very important. The theoretical implication of human economic behavior can lead to an infectious ego attitude without a more proportional public agency arrangement. From its practical implications, it is recommended that the Directorate General of Taxes immediately collaborate between networks of government agencies to agree on shared responsibilities with the aim of building a national tax culture.