THE EFFECT OF PROCEDURAL, DISTRIBUTIVE AND RETRIBUTIVE JUSTICE ON TAXPAYER’S COMPLIANCE
DOI:
https://doi.org/10.32500/jebe.v8i1.11060Keywords:
Procedural Justice, Distributive Justice, Retributive Justice, Tax Compliance, Tax Justice PerceptionAbstract
This study is motivated by the persistently low level of tax compliance in many developing countries, indicating that enforcement-based approaches alone are not fully effective. Therefore, it is important to understand psychological factors, particularly perceptions of fairness, in shaping taxpayer behavior. This study examines the effects of distributive justice, procedural justice, and retributive justice on tax compliance, grounded in justice theory. Using a quantitative approach and structural equation modeling, the results show that all three dimensions of justice have a positive and significant effect (p < 0.05) on tax compliance. These findings confirm that perceptions of fairness in the allocation of tax burdens, administrative processes, and the implementation of sanctions play a crucial role in encouraging compliance. In addition, the analysis of control variables reveals significant variations in compliance patterns across demographic groups, particularly based on gender, age, and education level. This study contributes to the behavioral taxation literature by emphasizing the central role of fairness in taxpayer decision-making, and provides practical implications for tax authorities to design policies that are more equitable, transparent, and responsive in order to enhance sustainable tax compliance.
References
Abdu, E., & Adem, M. (2023). Tax compliance behavior of taxpayers in Ethiopia: A review paper. Cogent Economics and Finance, 11(1). https://doi.org/10.1080/23322039.2023.2189559
Abdul-Jabbar, H., & Bin-Nashwan, S. A. (2022). Does deterrence-based enforcement matter in alms tax (Zakat) compliance? International Journal of Social Economics, 49(5), 710–725. https://doi.org/10.1108/IJSE-06-2021-0346
Al-Rahamneh, N. M., Al Zobi, M. K., & Bidin, Z. (2023). The influence of tax transparency on sales tax evasion among Jordanian SMEs: The moderating role of moral obligation. Cogent Business and Management, 10(2), 1–19. https://doi.org/10.1080/23311975.2023.2220478
Amelio, S., Gazzola, P., Vatamanescu, M., & Dinu, E. (2024). Social and ethical factors versus tax fraud: the role of corporate social responsibility in the Romanian context. Social Responsibility Journal, 21(1), 1–15. https://doi.org/10.1108/SRJ-04-2024-0273
Arlen, G. (2022). Citizen Tax Juries: Democratizing Tax Enforcement after the Panama Papers. Political Theory, 50(2), 193–220. https://doi.org/10.1177/00905917211018007
Azmi, D. A. W. M., & Daud, S. A. M. M. (2024). Reconceptualizing Tax Compliance Behavior: A Theoretical Matrix Approach. Accounting and Finance Research, 13(1), 67. https://doi.org/10.5430/afr.v13n1p67
Belahouaoui, R., & Attak, E. H. (2023). The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Morocco. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-04-2023-0213
Belahouaoui, R., & Attak, E. H. (2024). Exploring the relationship between taxpayers and tax authorities in the digital era: evidence on tax compliance behavior in emerging economies. International Journal of Law and Management. https://doi.org/10.1108/IJLMA-02-2024-0064
Campbell, C. M., Labrecque, R. M., Schaefer, R. L., Harvis, M., Zavita, K. R., Reddy, L., & Labranche, K. (2020). Do Perceptions of Legitimacy and Fairness Matter in Prison? Examining How Procedural and Distributive Justice Relate to Misconduct. Criminal Justice and Behavior, 47(12), 1630–1653. https://doi.org/10.1177/0093854820916901
Castañeda, N. (2024). Fairness and Tax Morale in Developing Countries. Studies in Comparative International Development, 59(1), 113–137. https://doi.org/10.1007/s12116-023-09394-z
Christian, C. (2017). Enhanced enforcement outcomes through a responsive regulation approach to sales tax enforcement. Journal of Public Budgeting, Accounting and Financial Management, 29(4), 464–497. https://doi.org/10.1108/jpbafm-29-04-2017-b002
Cullen, J. B., Turner, N., & Washington, E. (2021). Political Alignment, Attitudes Toward Government, and Tax Evasion†. American Economic Journal: Economic Policy, 13(3), 135–166. https://doi.org/10.1257/pol.20190409
Damayanti, T. W., Nastiti, P. K. Y., & Supramono, S. (2020). Does tax amnesty influence intention to comply?: If students are taxpayers already. Business Management and Education, 18(1), 1–13. https://doi.org/10.3846/bme.2020.10292
Farrar, J., Massey, D. W., Osecki, E., & Thorne, L. (2020). Tax Fairness: Conceptual Foundations and Empirical Measurement. Journal of Business Ethics, 162(3), 487–503. https://doi.org/10.1007/s10551-018-4001-4
Farrar, J., Massey, D. W., Osecki, E., & Thorne, L. (2021). The Association Between Vertical Equity and Presidential Voting Behavior and Taxpayers’ Compliance. Journal of Business Ethics, 172(1), 101–114. https://doi.org/10.1007/s10551-020-04453-0
Gangl, K., & Torgler, B. (2020). How to Achieve Tax Compliance by the Wealthy: A Review of the Literature and Agenda for Policy. Social Issues and Policy Review, 14(1), 108–151. https://doi.org/10.1111/sipr.12065
Girindratama, M. W., Nuswantara, D. A., & Alnajar, A. E. A. (2024). The Dark Tetrad Personality Traits of Tax Avoidance in the Manufacturing Small and Medium Enterprises ; An Empirical Evidence from Indonesia. AKRUAL: Jurnal Akuntansi, 16(1), 55–74. https://doi.org/10.26740/jaj.v16n1.p55-p74
Gobena, L. B. (2023). Justice, power and voluntary tax compliance: a moderation analysis among taxpayers in Addis Ababa, Ethiopia. Asian Review of Accounting, 32(4), 628–645. https://doi.org/10.1108/ARA-03-2023-0072
Graaf, C. Van de. (2021). Procedural fairness: Between human rights law and social psychology. Netherlands Quarterly of Human Rights, 39(1), 11–29. https://doi.org/10.1177/0924051921992749
Gull, A. A., Atif, M., & Hussain, N. (2023). Board gender composition and waste management: Cross-country evidence: Board gender diversity and waste management. British Accounting Review, 55(1), 101097. https://doi.org/10.1016/j.bar.2022.101097
Habib, A., D’Costa, M., & Al-Hadi, A. K. (2023). Consequences of local social norms: A review of the literature in accounting, finance, and corporate governance. Accounting and Finance, 63(1), 3–45. https://doi.org/10.1111/acfi.13034
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Sage Publications. European Journal of Tourism Research, 6(2), 211–213.
Hair, Joseph F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hasan, A., Sheikh, N., & Farooq, M. B. (2024). Exploring stakeholder perceptions of tax reform failures and their proposed solutions: a developing country perspective. Meditari Accountancy Research, 32(3), 721–755. https://doi.org/10.1108/MEDAR-03-2023-1961
Hermawan, M. S., Abigail, P., Martowidodjo, Y. H., & Tohang, V. (2020). Understanding Tax Amnesty and Tax Compliance in Indonesia: an Institutional Approach. Journal of Economics, Business, & Accountancy Ventura, 22(3), 424–434. https://doi.org/10.14414/jebav.v22i3.1810
Hofmann, E., Gangl, K., Kirchler, E., & Stark, J. (2014). Enhancing tax compliance through coercive and legitimate power of tax authorities by concurrently diminishing or facilitating trust in tax authorities. Law and Policy, 36(3), 290–313. https://doi.org/10.1111/lapo.12021
Horodnic, I. A. (2018). Tax morale and institutional theory: a systematic review. International Journal of Sociology and Social Policy, 38(9–10), 868–886. https://doi.org/10.1108/IJSSP-03-2018-0039
Hunt, A. K., Wang, J., Alizadeh, A., & Pucelj, M. (2024). Advancing a theoretical framework for exploring heuristics and biases within HR decision-making contexts. Personnel Review, 53(7), 1823–1841. https://doi.org/10.1108/pr-03-2023-0192
Inasius, F., Darijanto, G., Gani, E., & Soepriyanto, G. (2020). Tax Compliance After the Implementation of Tax Amnesty in Indonesia. SAGE Open, 10(4). https://doi.org/10.1177/2158244020968793
Khan, M. A., & Tjaraka, H. (2024). Tax justice and understanding: MSME compliance with Tax Regulation No. 55/2022 in Surabaya, Indonesia. Cogent Business and Management, 11(1). https://doi.org/10.1080/23311975.2024.2396042
Khatimah, S. A. C., & Girindratama, M. W. (2024). The Impact of Tax Sanctions, Awareness, and Knowledge on Taxpayer Compliance. Journal of Economics, Businessm and Government Challenges, 7(2), 11–20.
Koay, K. Y., & Lim, P. K. (2023). Abusive supervision and knowledge hiding: The moderated mediation role of overall justice and gender. Global Business and Organizational Excellence, 42(2), 16–28. https://doi.org/10.1002/joe.22181
Kock, N. (2015). Common Method Bias in PLS-SEM: A Full Collinearity Assessment Approach. International Journal of E-Collaboration (IJeC), 11(4), 1–10. https://doi.org/10.4018/ijec.2015100101
König, A., Graf-Vlachy, L., Bundy, J., & Little, L. M. (2020). A blessing and a curse: How Ceos’ trait empathy affects their management of organizational crises. Academy of Management Review, 45(1), 130–153. https://doi.org/10.5465/amr.2017.0387
Lindsay, I. K. (2018). Tax Fairness by Convention: A Defense of Horizontal Equity. Florida Tax Review, 19(2). https://doi.org/10.5744/ftr.2016.1000
Maulidi, A., Girindratama, M. W., Soeherman, B., & Andono, F. A. (2024). Organizational culture , power distance and corruption : The mediating role of religiosity. The Indonesian Accounting Review, 14(2), 203–221. https://doi.org/10.14414/tiar.v14i2.4795
Murphy, K., Bradford, B., & Jackson, J. (2016). Motivating Compliance Behavior Among Offenders: Procedural Justice or Deterrence? Criminal Justice and Behavior, 43(1), 102–118. https://doi.org/10.1177/0093854815611166
Musimenta, D., Nkundabanyanga, S. K., Muhwezi, M., Akankunda, B., & Nalukenge, I. (2017). Tax compliance of small and medium enterprises: a developing country perspective. Journal of Financial Regulation and Compliance, 25(2), 149–175. https://doi.org/10.1108/JFRC-08-2016-0065
Niesiobędzka, M., & Kołodziej, S. (2020). The fair process effect in taxation: the roles of procedural fairness, outcome favorability and outcome fairness in the acceptance of tax authority decisions. Current Psychology, 39(1), 246–253. https://doi.org/10.1007/s12144-017-9762-x
Nkundabanyanga, S. K., Mvura, P., Nyamuyonjo, D., Opiso, J., & Nakabuye, Z. (2017). Tax compliance in a developing country: Understanding taxpayers’ compliance decision by their perceptions. Journal of Economic Studies, 44(6), 931–957. https://doi.org/10.1108/JES-03-2016-0061
Oladipo, O., Nwanji, T., Eluyela, D., Godo, B., & Adegboyegun, A. (2022). Impact of tax fairness and tax knowledge on tax compliance behavior of listed manufacturing companies in Nigeria. Problems and Perspectives in Management, 20(1), 41–48. https://doi.org/10.21511/ppm.20(1).2022.04
Owusu, G. M. Y., Bart-Plange, M. A., Koomson, T. A. A., & Arthur, M. (2022). The effect of personality traits and tax morale on tax evasion intention. Journal of Financial Crime, 29(1), 272–292. https://doi.org/10.1108/JFC-02-2021-0026
Pandiangan, E. C., Andyarini, K. T., & Oktavia, D. (2023). Individual Taxpayer Compliance Behavior: Influence of Educational Level, Income Level Ethnic Diversity. Journal of Accounting, Management, and Economics Research (JAMER), 2(2), 105–118. https://doi.org/10.33476/jamer.v2i2.151
Radburn, M., & Stott, C. (2019). The social psychological processes of ‘procedural justice’: Concepts, critiques and opportunities. Criminology and Criminal Justice, 19(4), 421–438. https://doi.org/10.1177/1748895818780200
Rahmi, I., Defitri, S. Y., & Maison, W. (2024). Determinants of Taxpayer Compliance Through Taxpayer Satisfaction. Jurnal Ilmiah Akuntansi Kesatuan, 12(2), 257–264. https://doi.org/10.37641/jiakes.v12i2.2588
Rashid, S. F. A., Ramli, R., Palil, M. R., & Amir, A. M. (2021). Improving Voluntary Compliance Using Power of Tax Administrators: The Mediating Role of Trust. Asian Journal of Business and Accounting, 14(2), 101–136. https://doi.org/10.22452/ajba.vol14no2.4
Risse, M., & Meyer, M. (2019). Tax Competition and Global Interdependence. Journal of Political Philosophy, 27(4), 480–498. https://doi.org/10.1111/jopp.12185
Roberts, L. D., & Allen, P. J. (2015). Exploring ethical issues associated with using online surveys in educational research. Educational Research and Evaluation, 21(2), 95–108. https://doi.org/10.1080/13803611.2015.1024421
Rosid, A., Evans, C., & Tran-Nam, B. (2018). Tax Non-Compliance and Perceptions of Corruption: Policy Implications for Developing Countries. Bulletin of Indonesian Economic Studies, 54(1), 25–60. https://doi.org/10.1080/00074918.2017.1364349
Sabbagh, C., & Schmitt, M. (2016). Handbook of social justice theory and research. In Handbook of Social Justice Theory and Research. https://doi.org/10.1007/978-1-4939-3216-0
Short, J. L. (2021). The politics of regulatory enforcement and compliance: Theorizing and operationalizing political influences. Regulation and Governance, 15(3), 653–685. https://doi.org/10.1111/rego.12291
Sun, I. Y., Liu, J., Wu, Y., & Van Craen, M. (2021). Does Trust in Citizens Mediate the Relationship Between Internal and External Procedural Justice: A Comparison Between China and Taiwan Police. International Journal of Offender Therapy and Comparative Criminology, 65(4), 480–497. https://doi.org/10.1177/0306624X20946921
Thapa Karki, S., Xheneti, M., & Madden, A. (2021). To Formalize or Not to Formalize: Women Entrepreneurs’ Sensemaking of Business Registration in the Context of Nepal. Journal of Business Ethics, 173(4), 687–708. https://doi.org/10.1007/s10551-020-04541-1
Wever, M., & Ybema, J. F. (2024). Procedural Justice and the Design of Administrative Dispute Resolution Procedures. Social Justice Research, 37(1), 76–99. https://doi.org/10.1007/s11211-023-00428-4
Zalata, A. M., Ntim, C. G., Alsohagy, M. H., & Malagila, J. (2022). Gender diversity and earnings management: the case of female directors with financial background. In Review of Quantitative Finance and Accounting (Vol. 58, Issue 1). Springer US. https://doi.org/10.1007/s11156-021-00991-4
Zaragoza-Salcedo, A., Oroviogoicoechea, C., Saracíbar-Razquin, M. I., & Osácar, E. (2023). The significance of exploring conceptual equivalence within the process of the cross-cultural adaptation of tools: The case of the Patient’s Perception of Feeling Known by their Nurses Scale. Journal of Nursing Scholarship, 55(6), 1268–1279. https://doi.org/10.1111/jnu.12910
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Muhammad Wisnu Girindratama, Hari Hananto, Moh. Krisna Maulana
This work is licensed under a Creative Commons Attribution 4.0 International License.
