Tax Amnesty and Taxpayers’ Noncompliant Behaviour: Evidence from Indonesia

The impact of tax amnesty on taxpayer compliance is assessed using Indonesia as a case study, reflecting the country’s heavy reliance on tax revenue and more than two decades of tax reform experience. The 2008 tax amnesty is examined over a ten-year window (2003–2013) using five years of data before and after implementation. Compliance trends among individual and corporate taxpayers are analysed based on annual tax return filings and total income tax revenue, complemented by regression analysis to evaluate corporate compliance through tax aggressiveness, with foreign ownership as a moderating factor. The empirical evidence, drawn from 783 observations of listed manufacturing firms, indicates that tax amnesty effectively increased compliance among individual taxpayers, while corporate taxpayers exhibited higher levels of tax aggressiveness in the post-amnesty period. The presence of foreign investors is found to reinforce this increase, highlighting divergent compliance responses across taxpayer groups following tax amnesty implementation.

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