Risk-Based Tax Audits, Tax Office Type, and Economic Growth: Evidence on Voluntary Tax Compliance among Corporate Taxpayers in Indonesia's Manufacturing Sector

Agung Ponco Nugroho; Didin Mukodim; Sudaryanto  Sudaryanto

doi:10.61255/jeemba.v4i5.1743

Authors

Agung Ponco Nugroho Gunadarma University
Didin Mukodim Gunadarma University
Sudaryanto Gunadarma University

DOI:

https://doi.org/10.61255/jeemba.v4i5.1743

Keywords:

voluntary tax compliance, , risk-based tax audits, Correlated Random Effects, Tax Office type, economic growth, manufacturing sector

Abstract

Purpose – This study examines the effects of risk-based tax audits, Tax Office (KPP) type, and economic growth on the voluntary tax compliance of corporate taxpayers in Indonesia's manufacturing sector under the self-assessment system.

Design/methodology/approach – A quantitative explanatory approach is employed using a strongly balanced panel dataset of 16,339 corporate taxpayers from 2016 to 2022 (114,373 taxpayer-year observations). The data are analyzed using the Correlated Random Effects (CRE) model with year fixed effects and cluster-robust standard errors.

Findings/Results – Risk-based tax audits and economic growth have positive and statistically significant effects on voluntary tax compliance. Taxpayers registered with Primary Tax Offices (KPP Pratama) exhibit lower voluntary tax compliance than those registered with Special Tax Offices (KPP Khusus), while no significant differences are found among Medium Tax Offices (KPP Madya), Special Tax Offices, and Large Taxpayer Offices (KPP Wajib Pajak Besar).

Originality/Value – This study provides empirical evidence on the roles of risk-based tax audits, Tax Office type, and economic growth in improving voluntary tax compliance. The findings offer practical implications for strengthening risk-based tax administration under Indonesia's self-assessment system.

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