Enhancing Individual Taxpayer Compliance through Digital Tax Administration: The Mediating Role of Tax Service Quality

Abstract

Digital transformation in tax administration has become a strategic initiative to improve taxpayer compliance. However, the effectiveness of electronic tax services in promoting compliance is still inconclusive. This study aims to analyze the impact of the implementation of E-Registration, E-Filing, E-Billing, and E-SPT on the compliance of individual taxpayers with the quality of tax services as a mediation variable. The study uses a quantitative approach, primary data were collected from 400 registered individual taxpayers who had experience using electronic tax services at KPP Pratama Tangerang Timur. Data were collected from February to July 2023. Data analysis using Partial Least Squares and the measurement model met the required reliability and validity criteria. The findings revealed that E-Registration and E-Filing had a positive and significant impact on taxpayer compliance, while E-Billing and E-SPT had no significant impact. In addition, E-Registration, E-Filing, and E-Billing significantly improve the quality of tax services, whereas E-SPT does not. The quality of tax services was found to have no significant impact on taxpayer compliance and failed to mediate the impact of the electronic tax administration system on taxpayer compliance. This research contributes theoretically that future studies should incorporate digital literacy, tax awareness, and technological readiness into the research model to provide a more comprehensive explanation of taxpayer compliance behavior. These findings have practical implications for tax authorities in designing more effective digital transformation strategies to improve voluntary tax compliance.