The Effect of Tax Literacy and Tax System on Taxpayer Compliance with Tax Service Quality as an Intervening Variable

Abstract

The Republic of Indonesia aims to create a just and prosperous society in all aspects of national life. Taxes are a means of achieving this goal and financing national development for the public interest. Taxes contribute significantly to the state budget (APBN) as a means of supporting the success of Indonesia's development. Law Number 28 of 2007 concerning General Provisions and Tax Procedures states that taxes are mandatory contributions to the state made by individuals or entities that are coercive in nature, based on the law, without receiving direct compensation, and are used for state purposes for the prosperity of the people. Taxes are the primary source of development and financing for government expenditures by both the central and regional governments. The funding used for national development is substantial, and the funds used for this purpose continue to increase over time. Therefore, to meet this need, the government, through the Directorate General of Taxes (DGT), has established that taxes are an integral part of the sustainability of development plans. The government does not simply rely on foreign aid and loans for state funding. Taxes function as revenue (budgetary), where they are a crucial primary source of government revenue. Taxes are used to finance all expenditures by the central and regional governments. Furthermore, taxes serve as a tool to regulate government socioeconomic policies. The public can experience the role of taxes directly and indirectly in their daily lives. The importance of taxes in development requires increased tax revenue. Several facilities, such as education, transportation, healthcare, and public facilities and infrastructure, are sectors that receive government priority. Data shows that state revenue from taxes consistently accounts for over 70% of total state revenue. This increase is proportional to the rapid development of technology. For example, the current global development of information technology allows information to spread very quickly. Of course, the taxation aspect is not immune to the influence of the development and application of information and communication technology.