Service Quality and Perceived Fairness Drive Trust and Local Tax Compliance in Eastern Indonesia

DOI

10.2991/978-94-6239-709-5_160How to use a DOI?

Keywords

Digital Tax Service Quality; Perceived Fairness; Trust In Local Government; MSME Tax Compliance; PLS-SEM

Abstract

This study investigates how institutional antecedents digital tax service quality and perceived fairness shape local tax compliance among Micro, Small and Medium Enterprises (MSMEs) through the mediating role of trust in local government. Within Indonesia’s decentralized, self-assessment regime, we theorize that reliable, usable and responsive e-tax services, alongside equitable and transparent tariff/procedural arrangements, constitute legitimacy-building signals that foster trust and, consequently, compliance. A cross-sectional survey across three Eastern Indonesian cities was analyzed using PLS-SEM. Reflective measures demonstrated satisfactory reliability and convergent validity (CR ≥ 0.86; AVE ≥ 0.56), with discriminant validity corroborated via robustness checks. Structural estimates indicate that service quality (β = 0.248, p < 0.01) and perceived fairness (β = 0.555, p < 0.01) positively influence trust, and trust strongly predicts compliance (β = 0.798, p < 0.001). Indirect effects are significant for both antecedents, evidencing partial mediation. The model explains 61.2% of the variance in trust and 74.1% in compliance, underscoring the salience of institutional levers in a self-assessment environment. Theoretically, the study extends fairness- and trust-based compliance frameworks by incorporating digital service quality as an institutional driver. Practically, it recommends investing in dependable e-tax platforms and fairness-centred communication to strengthen trust and stabilize local revenues.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Aco Firsam Rizal
AU  - Abdul Rahman Kadir
PY  - 2026
DA  - 2026/06/20
TI  - Service Quality and Perceived Fairness Drive Trust and Local Tax Compliance in Eastern Indonesia
BT  - Proceedings of the 10th International Conference on Accounting, Management, and Economics (10th ICAME 2025)
PB  - Atlantis Press
SP  - 2290
EP  - 2302
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-709-5_160
DO  - 10.2991/978-94-6239-709-5_160
ID  - Rizal2026
ER  -