A Study of Trust Base Voluntary Tax Compliance through Tax Administration Digital Transformation in Indonesia

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INTRODUCTION
Modern tax administrations are significantly impacted by technological innovations such as big data, analysis, artificial intelligence, machine learning, the Internet of Things (IoT), mobility, and cloud computing. These patterns can be utilized individually or collectively to improve taxpayer compliance, motivate tax agency employees, streamline operations, and modernize services. This is where digital transformation begins. More and more taxpayers today want both public openness and a streamlined tax structure. This has forced policymakers all over the world to re-evaluate and modify the fiscal framework of their government and has led to a number of new steps, including those adopted by the representatives of the OECD, the EU and the Group of 20 (G20) (Baisalbayeva et al., 2018). Digital transformation includes tax administrations can use forecasting modelling, macroeconomic trends analysis and policy adjustments that help to build employee capacity in order to convert data into business assets. This will make enforcement easier and avoid tax mistakes and fraud. It can contribute to improving taxpayer services by promoting payment methods, making refunds quicker and making information easier to access. It could minimize operational time, decrease costs for tax administrations, enhance risk control strategies and productivity of audits and better encourage (inter)national priorities (Baisalbayeva et al., 2018). In addition, although a greater understanding of people, what they do and how they interact with the government will greatly increase their commitment to taxpayers.
The Indonesian tax authority (Directorate General of Taxes or "DGT") has acknowledged the necessity of integrating technology into tax reform. In May of 2004, DGT debuted electronic filing for the first time. E-filing was only accessible through an Application Service Provider at the time. In 2014, DGT centralized all tax filing and payment services into a single system. DJP Online (https://djponline.pajak.go.id) was developed by DGT as an electronic tax return reporting (eSPT) entry point. The website of the Directorate General of Taxes (http://www.pajak.go.id) now provides access to DGT online services.  (Nazarov et al., 2019). These spaces are largely supported by the current state of the economy and tax administrations' willingness to allow taxpayers to comply with their taxes voluntarily. Compliance with taxpayers is not only dependent on temporary imposed tax compliance, but also on voluntary tax compliance. In order to foster long-term growth, voluntary fiscal compliance is critical, because increased voluntary tax compliance would impact the continued rise in tax receipts as it is not focused on coercion or threats of sanctions.

B. Digital Transformation of Tax Administration.
Digital transformation is the use of computer and internet technology to generate economic value more efficiently and effectively. More broadly, it refers to advances in digital technology in its entirety; the way that we function, communicate, and customize and the creation of wealth within the system. Digital transformation has had an evident, enduring, and even transformative effect not only on business processes and players, but also on the lives of individuals and on society as in general (Reddy & Reinartz, 2017). Tax administration with the following primary areas will benefit from digital transformation: openness, taxpayers' centric solutions, connected tax players, data-driven decisions and automated processes. Research by OECD shows that enhanced strategy, procedures and investments transparency will enhance taxpayer satisfaction and voluntary compliance through highly organized and/or visually supported data. Tax administration and taxpayers expect the tax information they receive from other holders, for example banks and consumers, to be shared easily in real-time (Baisalbayeva et al., 2018) This enables tax administrations and taxpayers (businesses and individuals) to increase connections and cooperation. It also helps tax administrations securely share relevant information with banks, entrepreneurs, bursaries, trade chambers, etc. A recent development in the financial sector is that tax administrations exchange taxpayer details automatically across jurisdictions. Taxpayers would like to be assured of the right degree of privacy, security and confidentiality for their personal details. Simultaneously, they expect to be provided with customized, reliable services in real time. To balance the two demands, tax administrations are looking for ways in which structured and unstructured data can be collected, secured, analyses and managed effectively. This helps to ensure compliance, enables policymakers to take decisions which drive growth and enhance their public image with greater transparency and accountability.

C. Trust
Many crucial economic, social, and political behaviors require trust. To trust someone is to believe they will act in your best interests and will not take advantage of you if the opportunity arises (Ben-Ner & Halldorsson, 2010). n the context of tax compliance, it indicates that taxpayers have faith that authorities will act in the best interests of the social collective rather than their own. Similarly, authorities rely on taxpayers to provide truthful and accurate information on tax returns. According to (Feld & Frey, 2002), the way authorities treat taxpayers demonstrates their confidence in them. For instance, when a mistake is made on an individual tax return, taxpayers are not automatically suspected of cheating, indicating that taxpayers are trusted. The concept of trust emphasizes the taxpayer's relationship with the tax authority because the taxpayer has faith in the tax authority (Daniela & Luís, 2014). If taxpayers have confidence in the tax agency, they are more likely to pay their dues (Kastlunger et al., 2013). According to the existing literature, trust is a crucial factor in compliance behaviour in a variety of contexts. In conclusion, tax payers who are perceived as trustworthy are more likely to comply. For instance, trust in tax authorities is positively associated with tax compliance (Daniela & Luís, 2014).

D. Tax Compliance
Numerous studies have been conducted to provide tax authorities with formulas and methods for enhancing compliance. The majority of these studies have adopted an economic or behavioral research methodology. Compliance with reporting requirements is the generally accepted definition, which means that the taxpayer files all required tax returns on time and that the returns accurately report tax liability in accordance with all applicable regulations and court rulings in effect at the time the return is filed (Devos, 2008). Another definition from tax compliance is the willingness of individuals and corporations to pay their taxes accurately and on time, as requested by tax authorities (Verboon & van Dijke, 2007). Tax compliance has also been defined as the capacity of a tax-liable entity or individual to file accurate, complete, and acceptable tax returns in accordance with state tax laws and regulations for tax assessment (Badara, 2012)

E. Procedural Fairness.
Procedural fairness, according to Ivancevich et al., (1990) relates to perceived fairness in administrative processes and procedures used to make allocation of resources and resource decisions. In taxation fairness procedure is one of the important sources for the public in evaluating the level of morality of tax officials in carrying out their functions as tax collectors. With improved procedural fairness, there will be more trust in the tax authority (Christoph et al., 2013).

F. Power Legitimacy.
Power based on the foundation of formal power is divided into three namely: First, coercive power is fear (Robbin and Judge, 2007). Someone gave his reaction to this power out of fear of negative consequences that might occur if yes disobedient; second, the power of reward, one fulfils the wishes or direction of others because, in doing so, he will benefit positively; therefore, a person who can share a reward or reward that other see as worth will have power over that other person; third, the power of legitimacy represents the formal authority to rule and manage the organization's resources.

HYPOTHESIS DEVELOPMENT
From The Theory of Slippery Slope and the aforementioned constructs, we assembled the conceptual framework for this study.

A. Data Collection and sample.
An online survey was used in this study to effectively reach more interested populations. To send the responder an online survey, we used Google Forms. Taxpayers from Indonesia represent approximately the study's sample population. Selecting responders among Indonesian taxpayers nationwide involved the use of simple random sampling. Taxpayers from 60 cities in Indonesia were randomly selected as a sample in this study.
The study received 285 responses. Three respondents failed to freely engage in the survey, hence they were excluded from the sample. 282 respondents who were obtained can be used as samples in this study based on the aforementioned description. Table 1 shows the sample's demographic characteristics.
The sample had a higher percentage of males (58%) than females (42 percent). The bulk of respondents were middle-aged, with more than half of them-55 percent-being in the 30-40 age range. The 20-30 age range came in second with 33 percent of the total. Employee came out as the top occupation among respondents, amounting for 56 percent. 39 percent of respondents identified undergraduate as their major educational level, which was followed by high school and a diploma by 25 and 21 percent, respectively.

B. Measurement scales
The survey instrument was made up of pre-tested scales with 5-Likert. To measure the Procedural Fairness variable, we used 7 questions items which were adapted from (Murphy, 2004). Trust variable were measured by 4 questions that adopted from  We were able to confirm, as indicated in Table 2, that all measurement items exceed their minimal factor loading requirement of 0.7 and significantly contribute to each of their respective constructs (Ringle et al., 2018). The convergent validity of measurement scales: all average extracted variance values are greater than 0.5; all standardized loadings associated with observable items are significant (Hair et al., 2017). Likewise, the Fornell and Larcker criterion was used to confirm discriminatory validity (Fornell et al., 1981). For each concept, all correlations between latent component pairs are less than the square root of the AVE, allowing us to reach the conclusion that our modelling is acceptable (see Table 3).

B. Hypothesis Test.
In order to test our proposed hypothesis, we used the bootstrapping approach with a resampling of 5000 to estimate the correlation between constructs and their significance. Standard error and t-statistics are available for assessing the significance of the structural coefficients at this stage of bootstrapping (Henseler et al., 2015). Figure 2 and Table 4 show the results for path coefficients/direct effects together with a variety of fit indexes The meaning of the coefficient is shown by the Empirical t-value, determined by the bootstrapping method. If the t-value is greater than a critical threshold, the path cofficient is considered important. The crucial value is the importance of the coefficient at a particular likelihood of errors (i.e., significance level). Depending of the field and the quality of the study, choice of essential importance or significance. In PLS-SEM studies it is normally presumed 5% (t table >1  This study found support for six of nine proposed hypotheses. Results shown in Table 4 indicate that digital transformation on tax administration perception (DTP) had a significant and positive affect Perceive of fairness (PF) (Path coefficient = 0.899, p < 0.05, t > 1.96) confirming hypotheses H1. We can also affirm that DTP positively and significantly influence Power Legitimacy (PL) (Path coefficient = 0.926, p < 0.05, t > 1.96), confirming hypotheses H2. In addition, DTP had a positive and significant impact on Trust in Tax Authority (Tr) (Path coefficient = 0.467, p < 0.05, t > 1.96); hence H3 was supported. Perceive of Fairness (PF) positively and significantly influence Trust (Tr) (Path coefficient = 0.559, p < 0.05, t > 1.96) confirming hypotheses H4. Meanwhile, Power Legitimacy had a negative path coefficient on Trust but had significant value on t-statistics and P value (Path coefficient = -0.358, p < 0.05, t > 1.96); confirming H5 was supported. Nonetheless, DTP had positive and no significant influence on Tax Compliance (TC) (Path coefficient = 0.109, p > 0.05, t < 1.96); consequently, H6 was not supported. Perceive Fairness (PF) had a positive and no significant influence on Tax Compliance (TC) (Path coefficient = 0.138, p > 0.05, t < 1.96), therefore, hypotheses H7 was not supported. We can conclude Power Legitimacy had a positive and no significant influence on Tax Compliance (TC) ((Path coefficient = 0.019, p > 0.05, t < 1.96), therefore, H8 also not supported. Finally, our data show that Trust positively and significant influence on Tax Compliance (Path coefficient = 0.641, p < 0.05, t > 1.96) so that H9 was accordingly supported.

DISCUSSION
This study used an expanded Slippery Slope theory model as a theoretical lens to analyse the impact of taxpayers' tax compliance decisions and the digital transformation of tax administrations on trust. Six variables are included in the proposed model, which are connected by nine path links (H1-H9). Six out of the nine proposed hypotheses received support from structural equation modelling, confirming some of the relationships in the Slippery Slope theory that relate to voluntary tax compliance based on trust, perceived fairness, power legitimacy, and extended with tax administrations' perceptions of digital transformation. According to the results of the hypothesis testing, hypothesis 1, 2, and 3 were confirmed since the digital transformation of tax administrations perception (DTP) had a positive and significant impact on perceived fairness (PF), power legitimacy (PL), and trust (Tr). Hypothesis 6 was not validated since DTP had no direct positive impact on voluntary tax compliance (TC). This finding supports the research of (Gracia et al., 2015) who used an online poll to gather data from 448 Spanish residents who used public eservices to investigate how much e-government efforts impact public administration trust. They discover that the use of digital services can enhance trust. The perceived value of public e-services does, in fact, have a favorable impact on public trust in government.
Trust as a mediator factor of tax compliance has three antecedents: perceived fairness (PF), perceived digital transformation of tax administrations perception (DTP), and legitimacy of power (PL). Facilitating DTP (H3) and PF (H4) positively and significantly influence the tax compliance (TC). Meanwhile, H5, which was facilitated by power legitimacy (PL), has a detrimental and severe impact on tax compliance (TC). The findings corroborate those of studies by (Dijke et al., 2010)and (Verboon et al., n.d.), which discovered empirical evidence that procedural fairness has a positive and significant impact on tax compliance. This implies that