Do Modern Tax Administration Systems and Tax Audits Enhance Taxpayer Compliance? Evidence on the Moderating Effect of Tax Socialization

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Bogor— Modern Tax Systems and Audits Boost Corporate Taxpayer Compliance. This finding is revealed in a study conducted by Edi Wahid Kasnanto, Firdaus Amyar, and Sutarti from the Kesatuan Institute of Business and Informatics, Bogor, and published in January 2026 in the International Journal of Business and Applied Economics.

The research focuses on corporate taxpayers registered at the Cibinong Primary Tax Office (KPP Pratama Cibinong) during 2023. The results show that tax administration modernization and tax audits not only have a direct impact on compliance, but become far more effective when reinforced by continuous and well-targeted tax socialization programs.

Tax Compliance Remains a National Challenge

Taxes serve as the backbone of national development financing. However, Indonesia continues to face a persistent challenge in the form of a relatively low tax ratio compared to other Asia-Pacific countries and OECD members. Over the past several years, Indonesia’s tax ratio has remained stagnant at around 10–11 percent, far below that of developed economies.

Fluctuations in tax revenue between 2019 and 2023, including a sharp decline during the COVID-19 pandemic, indicate that taxpayer compliance has not yet reached a stable level. At the local level, this situation is reflected at KPP Pratama Cibinong, which recorded lower revenue realization and compliance ratios compared to KPP Pratama Cileungsi. This condition motivated the researchers to examine the determinants of corporate taxpayer compliance more closely.

Examining the Role of Modern Systems, Audits, and Socialization

The study applies a quantitative survey approach by distributing questionnaires to 99 corporate taxpayers selected from a population of more than 10,000 registered taxpayers. The collected data were analyzed using statistical modeling to assess the relationships between modern tax administration systems, tax audits, tax socialization, and taxpayer compliance.

In this study, a modern tax administration system includes organizational structure, human resource quality, the use of information technology, and service procedures. Tax audits are defined as supervisory activities related to tax reporting and payment, while tax socialization refers to outreach, education, and information dissemination activities carried out by tax authorities.

Key Findings: Socialization as a Strengthening Factor

The analysis demonstrates that a modern tax administration system has a positive and significant effect on corporate taxpayer compliance. In practical terms, better tax systems and services increase the likelihood that companies will comply with tax obligations.

Tax audits are also shown to significantly improve compliance. Professional and consistent audit practices encourage taxpayers to be more disciplined in reporting and paying taxes in accordance with regulations.

One of the most important findings highlights the dual role of tax socialization. Beyond its direct impact on compliance, tax socialization significantly strengthens the effects of both modern tax administration systems and tax audits. In other words, modernization and audits are far more effective when taxpayers clearly understand tax rules, objectives, and procedures through proper socialization.

Overall, the combined influence of these three factors explains more than 87 percent of the variation in corporate taxpayer compliance at KPP Pratama Cibinong, indicating that the research model is statistically strong.

Implications for Businesses and Public Policy

For the business sector, the findings confirm that tax compliance is not solely driven by sanctions, but also by system clarity and the quality of communication with tax authorities. Transparent and accessible tax systems help reduce administrative errors and build trust among corporate taxpayers.

For policymakers, the study delivers a clear message: technological modernization and law enforcement must be accompanied by continuous public education. Effective tax socialization reduces resistance to audits and improves taxpayers’ understanding of their rights and obligations.

The researchers emphasize that tax socialization should not be treated as a ceremonial activity, but as a strategic instrument for fostering long-term compliance. When taxpayers understand the purpose of audits and how modern tax systems operate, voluntary compliance becomes more likely.

Toward Sustainable Tax Compliance

This study reinforces the view that tax reform cannot rely solely on system upgrades or increased audit intensity. Educational and communicative approaches are essential to ensure that tax policies function effectively and sustainably.

The authors recommend that future studies expand the scope by incorporating additional factors such as tax awareness, tax sanctions, service quality, and taxpayer morality. A more comprehensive understanding of compliance drivers is expected to support the development of more targeted and effective tax compliance strategies.

Author Profiles

Edi Wahid Kasnanto, S.E., M.Ak. - Institut Bisnis dan Informatika Kesatuan Bogor
Firdaus Amyar, S.E., M.Ak. - Institut Bisnis dan Informatika Kesatuan Bogor
Sutarti, S.E., M.Ak. - Institut Bisnis dan Informatika Kesatuan Bogor.

Research Source

Edi Wahid Kasnanto, Firdaus Amyar, Sutarti. Do Modern Tax Administration Systems and Tax Audits Enhance Taxpayer Compliance? Evidence on the Moderating Effect of Tax Socialization.

International Journal of Business and Applied Economics, Vol. 5 No. 1,, hlm. 153–17.2026

DOI: https://doi.org/10.55927/ijbae.v5i1.570

URL Resmi: https://nblformosapublisher.org/index.php/ijbae