The Tax Audit, Discrimination, and Machiavellianism in Indonesian

https://doi.org/10.35912/sakman.v5i1.4391
Published: Jul 15, 2025

Abstract:

Purpose: This study investigates the impact of tax audits and tax discrimination on tax evasion among MSMEs in Indonesia, with a particular focus on the moderating role of Machiavellianism.

Methodology/approach: A quantitative survey was conducted with 170 MSME actors in Tangerang using structured questionnaires. Data were analyzed using CB-SEM with Mplus 8.0. A quantitative survey was conducted with 170 MSME actors in Tangerang using structured questionnaires. Respondents were selected purposively, and data were analyzed using CB-SEM with Mplus 8.0 to examine the influence of tax audits, tax discrimination, and Machiavellianism on tax evasion.

Results/findings: Tax audits and tax discrimination significantly increase tax evasion, especially among individuals with high Machiavellian traits. These findings highlight the importance of fairness, ethical awareness, and psychological considerations in designing effective tax compliance strategies.

Conclusion: Tax audits and discrimination can backfire and raise evasion risks among Machiavellian individuals, indicating the need for psychologically informed tax strategies.

Limitations: The study's use of convenience sampling in a single location limits generalizability. Future research should explore broader regions. Practical implications include risk-based audits, ethics education, and improved tax official professionalism.

Contribution: Theoretically, the study integrates psychological factors into MSME tax compliance. Practically, it promotes fair policies and ethical approaches to reduce evasion and strengthen trust in the tax system.

Keywords:
1. Machiavellianism
2. Tax Audit
3. Tax Discrimination
4. Tax Evasion
Authors:
Michael Michael
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Michael, M. (2025). The Tax Audit, Discrimination, and Machiavellianism in Indonesian . Studi Akuntansi, Keuangan, Dan Manajemen, 5(1), 231–242. https://doi.org/10.35912/sakman.v5i1.4391
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Vol. 5 No. 1 (2025): Juli
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References

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    Alasfour, F., Samy, M., & Bampton, R. (2016). The determinants of tax morale and tax compliance: Evidence from Jordan. Advances in Taxation, 23, 125–171. https://doi.org/10.1108/S1058-749720160000023005

    Alm, J., & McKee, M. (2006). Audit Certainty, Audit Productivity, and Taxpayer Compliance. National Tax Journal, 59(4), 801–816. https://doi.org/10.17310/ntj.2006.4.03

    Ananda, F., & Marlius, D. (2021). Indikasi Machiavellianism Dalam Pembuatan Keputusan Etis Auditor Senior. JURNAL PUNDI, 5(2). https://doi.org/10.31575/jp.v5i2.368

    Aprillia, W., & Maharani, S. N. (2020). The dark triad and ethical behavior. Proceedings of the 7th Regional Accounting Conference, 173, 308–320.

    Beer, S., Kasper, M., Kirchler, E., & Erard, B. (2019). Do audits deter or provoke future tax noncompliance? Evidence on self-employed taxpayers.

    Benkraiem, R., Uyar, A., Kilic, M., & Schneider, F. (2021). Ethical behavior, auditing strength, and tax evasion: A worldwide perspective. Journal of International Accounting, Auditing and Taxation, 43. https://doi.org/10.1016/j.intaccaudtax.2021.100380

    Bridges, M. (1996). Tax evasion — a crime in itself: The relationship with money laundering. Journal of Financial Crime, 4(2), 161–168. https://doi.org/10.1108/eb025769

    Collymore, A. (2020). The ethics of tax evasion: Literature review.

    Çule, M., & Fulton, M. (2009). Business culture and tax evasion: Why corruption and the unofficial economy can persist. Journal of Economic Behavior and Organization, 72(3), 811–822. https://doi.org/10.1016/j.jebo.2009.08.005

    Debacker, J., Tran, A., & Yuskavage, A. (2018). Once bitten, twice shy? The lasting impact of enforcement on tax compliance. Journal of Law and Economics, 61, 1–35. www.journals.uchicago.edu

    Dewi, R. C., Petra, B. A., Yamasitha, Agusti, A., & Tungkir, A. J. B. (2021). The effect of taxation socialization, understanding taxation, tax rates, and tax sanction on tax compliance in MSMe Padang City. Journal of Accounting and Finance Management, 1(6), 330–342. https://doi.org/10.38035/jafm.v1i6

    Doerrenberg, P., & Peichl, A. (2022). Tax Morale and the Role of Social Norms and Reciprocity – Evidence from a Randomized Survey Experiment. FinanzArchiv, 78(1–2), 44. https://doi.org/10.1628/fa-2021-0016

    Falsetta, D., Schafer, J. K., & Tsakumis, G. T. (2024). How Government Spending Impacts Tax Compliance. Journal of Business Ethics, 190(2), 513–530. https://doi.org/10.1007/s10551-023-05383-3

    Fauziyyah, D. I., Septiani, T., & Musyaffi, A. M. (2020). Potential factor that determines taxpayer compliance: The development of theory of reason action. International Conference on Accounting, Management and Entrepreneurship, 63–66.

    Fuentes-Contreras, R., Mungaray-Lagarda, A., & Ramirez-Urquidy, M. (2020). Tax morale and social business in Mexico. Journal of Developmental Entrepreneurship, 25(2), 1–10. https://doi.org/10.1142/S1084946720500119

    Helmy, H., Dwita, S., & Cheisviyanny, C. (2021). The influence of gender and Machiavellianism on tax evasion (A study on accounting students). Economics, Business and Management, Accounting and Entrepreneurship, 89–93.

    Inasius, F. (2019). Factors influencing SME tax compliance: Evidence from Indonesia. International Journal of Public Administration, 42(5), 367–379. https://doi.org/10.1080/01900692.2018.1464578

    Irawan, B., & Khoirunurrofik, K. (2021). Understanding tax morale of micro, small, and medium enterprises in Jabodetabek. Humanities Universitas Indonesia Conference, 449–457.

    Kenyon, T. (2008). Tax evasion, disclosure, and participation in financial markets: Evidence from Brazilian firms. World Development, 36(11), 2512–2525. https://doi.org/10.1016/j.worlddev.2007.11.010

    Kirchler, E., Kogler, C., & Muehlbacher, S. (2014). Cooperative tax compliance: From deterrence to deference. Current Directions in Psychological Science, 23(2), 87–92. https://doi.org/10.1177/0963721413516975

    Laz?r, R.-E. (2013). Tax evasion between legality and criminal offense. Procedia - Social and Behavioral Sciences, 92, 462–466. https://doi.org/10.1016/j.sbspro.2013.08.702

    Lee, I. (2018). Income tax evasion responses to tax rate and tax enforcement rate. Advances in Economics and Business, 6(4), 269–279. https://doi.org/10.13189/aeb.2018.060407

    Leoh, F. T., Monteiro, Y. M., & Udju, H. R. (2023). Increasing legal awareness of weaving micro, small, and medium enterprises to the obligation to pay taxes in rote Ndao Regency is reviewed from Government Regulation Number 23 of 2018 concerning income tax. Jurnal Indonesia Sosial Sains, 4(07), 656–662. http://jiss.publikasiindonesia.id/

    Mazzolini, G., Pagani, L., & Santoro, A. (2017). The deterrence effect of real-world operational tax audits. https://ssrn.com/abstract=2914374http://dems.unimib.it/Electroniccopyavailableat:https://ssrn.com/abstract=2914374

    Michael; Michael, & Widjaja, W. (2024). Dynamics of tax evasion in Indonesian SMEs: Tax rates, self-assessment systems, and tax morale. Soedirman Accounting Review (SAR): Journal of Accounting and Business, 01(02), 32–46.

    Mittone, L., Ploner, M., & Verrina, E. (2021). When the state does not play dice: aggressive audit strategies foster tax compliance. Social Choice and Welfare, 57(3), 591–615. https://doi.org/10.1007/s00355-021-01325-y

    Mohamad, A., Zakaria, M. H., & Hamid, Z. (2016). Cash economy: Tax evasion amongst SMEs in Malaysia. Journal of Financial Crime, 23(4), 974–986. https://doi.org/10.1108/JFC-05-2015-0025

    Muslim, A. (2022). Maximizing the Indonesian’s tax revenue from micro, small, and medium enterprises (MSMEs) sector. JEMASI: Jurnal Ekonomi Manajemen Dan Akuntansi, 18(2), 228–238.

    Ng, J.-N., Lee, T.-H., & Wong, S.-C. (2020). Factors influencing taxpayers’ willingness to pay tax: A study of SMEs in Klang Valley. International Journal of Academic Research in Accounting, Finance and Management Sciences, 10(1), 149–156. https://doi.org/10.6007/ijarafms/v10-i1/7049

    Novikasari, S. R., Ly, D. Q., & Gershaneck, K. (2021). Taxing micro, small and medium enterprises in Yogyakarta: Regulation and compliance. Bestuur, 9(1), 43–52. https://doi.org/10.20961/bestuur.v9i1.49184

    Ogembo, D. (2020). Taxation of self-employed professionals in Africa: Three lessons from a Kenyan case study. https://ssrn.com/abstract=3801878

    Peprah, C., Abdulai, I., & Agyemang-Duah, W. (2020). Compliance with income tax administration among micro, small and medium enterprises in Ghana. Cogent Economics and Finance, 8(1), 1–25. https://doi.org/10.1080/23322039.2020.1782074

    Rana, G., & Choudhary, R. (2006). Micro small and medium scale enterprises-"hidden and helping hand in economic growth". http://www.dnb.co.in/SME_cluster_series2012_Indor

    Saad, B. (2017). Analisis pengaruh kesadaran membayar pajak, pengetahuan dan pemahaman peraturan perpajakan, dan pemeriksaan pajak terhadap kemauan membayar pajak WPOP di KPP Pratama DKI Jakarta. JRAA, 4(2), 13–29.

    Shafer, W. E., & Simmons, R. S. (2008). Social responsibility, machiavellianism and tax avoidance: A study of Hong Kong tax professionals. Accounting, Auditing and Accountability Journal, 21(5), 695–720. https://doi.org/10.1108/09513570810872978

    Silaen, C. (2015). Pengaruh sistem perpajakan, diskriminasi, teknologi dan informasi perpajakan terhadap persepsi wajib pajak mengenai etika penggelapan pajak (tax evasion). Jom Fekon, 2(2), 1–15.

    Snow, A., & Warren, R. S. (2007). Audit uncertainty, bayesian updating, and tax evasion. Public Finance Review, 35(5), 555–571. https://doi.org/10.1177/1091142107299609

    Sofiamanan, N. Z., Machmuddah, Z., & T. A. H., N. (2023). Profitability, capital intensity, and company size against tax avoidance with leverage as an intervening variable. Journal of Applied Accounting and Taxation Article History, 8(1), 21–29.

    Sutrisno, & Konde, Y. T. (2022). Pengaruh tax amnesty, self assessment system dan keadilan pajak terhadap persepsi wajib pajak atas tindakan penggelapan pajak pada wajib pajak orang pribadi di kota Samarinda. AKUNTABEL: Jurnal Akuntansi Dan Keuangan, 19(3), 701–713.

    Widuri, R., Devina, D., Marta, F., & Wati, Y. (2019). The influence of penalties, the trust on authorities, and the tax audit toward tax compliance. Journal of Economics and Business, 2(2), 218–229. https://doi.org/10.31014/aior.1992.02.02.81

  1. Aladejebi, O. (2018). Measuring tax compliance among small and medium enterprises in Nigeria. International Journal of Accounting and Taxation, 6(2), 29–40. https://doi.org/10.15640/ijat.v6n2a4
  2. Alasfour, F., Samy, M., & Bampton, R. (2016). The determinants of tax morale and tax compliance: Evidence from Jordan. Advances in Taxation, 23, 125–171. https://doi.org/10.1108/S1058-749720160000023005
  3. Alm, J., & McKee, M. (2006). Audit Certainty, Audit Productivity, and Taxpayer Compliance. National Tax Journal, 59(4), 801–816. https://doi.org/10.17310/ntj.2006.4.03
  4. Ananda, F., & Marlius, D. (2021). Indikasi Machiavellianism Dalam Pembuatan Keputusan Etis Auditor Senior. JURNAL PUNDI, 5(2). https://doi.org/10.31575/jp.v5i2.368
  5. Aprillia, W., & Maharani, S. N. (2020). The dark triad and ethical behavior. Proceedings of the 7th Regional Accounting Conference, 173, 308–320.
  6. Beer, S., Kasper, M., Kirchler, E., & Erard, B. (2019). Do audits deter or provoke future tax noncompliance? Evidence on self-employed taxpayers.
  7. Benkraiem, R., Uyar, A., Kilic, M., & Schneider, F. (2021). Ethical behavior, auditing strength, and tax evasion: A worldwide perspective. Journal of International Accounting, Auditing and Taxation, 43. https://doi.org/10.1016/j.intaccaudtax.2021.100380
  8. Bridges, M. (1996). Tax evasion — a crime in itself: The relationship with money laundering. Journal of Financial Crime, 4(2), 161–168. https://doi.org/10.1108/eb025769
  9. Collymore, A. (2020). The ethics of tax evasion: Literature review.
  10. Çule, M., & Fulton, M. (2009). Business culture and tax evasion: Why corruption and the unofficial economy can persist. Journal of Economic Behavior and Organization, 72(3), 811–822. https://doi.org/10.1016/j.jebo.2009.08.005
  11. Debacker, J., Tran, A., & Yuskavage, A. (2018). Once bitten, twice shy? The lasting impact of enforcement on tax compliance. Journal of Law and Economics, 61, 1–35. www.journals.uchicago.edu
  12. Dewi, R. C., Petra, B. A., Yamasitha, Agusti, A., & Tungkir, A. J. B. (2021). The effect of taxation socialization, understanding taxation, tax rates, and tax sanction on tax compliance in MSMe Padang City. Journal of Accounting and Finance Management, 1(6), 330–342. https://doi.org/10.38035/jafm.v1i6
  13. Doerrenberg, P., & Peichl, A. (2022). Tax Morale and the Role of Social Norms and Reciprocity – Evidence from a Randomized Survey Experiment. FinanzArchiv, 78(1–2), 44. https://doi.org/10.1628/fa-2021-0016
  14. Falsetta, D., Schafer, J. K., & Tsakumis, G. T. (2024). How Government Spending Impacts Tax Compliance. Journal of Business Ethics, 190(2), 513–530. https://doi.org/10.1007/s10551-023-05383-3
  15. Fauziyyah, D. I., Septiani, T., & Musyaffi, A. M. (2020). Potential factor that determines taxpayer compliance: The development of theory of reason action. International Conference on Accounting, Management and Entrepreneurship, 63–66.
  16. Fuentes-Contreras, R., Mungaray-Lagarda, A., & Ramirez-Urquidy, M. (2020). Tax morale and social business in Mexico. Journal of Developmental Entrepreneurship, 25(2), 1–10. https://doi.org/10.1142/S1084946720500119
  17. Helmy, H., Dwita, S., & Cheisviyanny, C. (2021). The influence of gender and Machiavellianism on tax evasion (A study on accounting students). Economics, Business and Management, Accounting and Entrepreneurship, 89–93.
  18. Inasius, F. (2019). Factors influencing SME tax compliance: Evidence from Indonesia. International Journal of Public Administration, 42(5), 367–379. https://doi.org/10.1080/01900692.2018.1464578
  19. Irawan, B., & Khoirunurrofik, K. (2021). Understanding tax morale of micro, small, and medium enterprises in Jabodetabek. Humanities Universitas Indonesia Conference, 449–457.
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  21. Kirchler, E., Kogler, C., & Muehlbacher, S. (2014). Cooperative tax compliance: From deterrence to deference. Current Directions in Psychological Science, 23(2), 87–92. https://doi.org/10.1177/0963721413516975
  22. Laz?r, R.-E. (2013). Tax evasion between legality and criminal offense. Procedia - Social and Behavioral Sciences, 92, 462–466. https://doi.org/10.1016/j.sbspro.2013.08.702
  23. Lee, I. (2018). Income tax evasion responses to tax rate and tax enforcement rate. Advances in Economics and Business, 6(4), 269–279. https://doi.org/10.13189/aeb.2018.060407
  24. Leoh, F. T., Monteiro, Y. M., & Udju, H. R. (2023). Increasing legal awareness of weaving micro, small, and medium enterprises to the obligation to pay taxes in rote Ndao Regency is reviewed from Government Regulation Number 23 of 2018 concerning income tax. Jurnal Indonesia Sosial Sains, 4(07), 656–662. http://jiss.publikasiindonesia.id/
  25. Mazzolini, G., Pagani, L., & Santoro, A. (2017). The deterrence effect of real-world operational tax audits. https://ssrn.com/abstract=2914374http://dems.unimib.it/Electroniccopyavailableat:https://ssrn.com/abstract=2914374
  26. Michael; Michael, & Widjaja, W. (2024). Dynamics of tax evasion in Indonesian SMEs: Tax rates, self-assessment systems, and tax morale. Soedirman Accounting Review (SAR): Journal of Accounting and Business, 01(02), 32–46.
  27. Mittone, L., Ploner, M., & Verrina, E. (2021). When the state does not play dice: aggressive audit strategies foster tax compliance. Social Choice and Welfare, 57(3), 591–615. https://doi.org/10.1007/s00355-021-01325-y
  28. Mohamad, A., Zakaria, M. H., & Hamid, Z. (2016). Cash economy: Tax evasion amongst SMEs in Malaysia. Journal of Financial Crime, 23(4), 974–986. https://doi.org/10.1108/JFC-05-2015-0025
  29. Muslim, A. (2022). Maximizing the Indonesian’s tax revenue from micro, small, and medium enterprises (MSMEs) sector. JEMASI: Jurnal Ekonomi Manajemen Dan Akuntansi, 18(2), 228–238.
  30. Ng, J.-N., Lee, T.-H., & Wong, S.-C. (2020). Factors influencing taxpayers’ willingness to pay tax: A study of SMEs in Klang Valley. International Journal of Academic Research in Accounting, Finance and Management Sciences, 10(1), 149–156. https://doi.org/10.6007/ijarafms/v10-i1/7049
  31. Novikasari, S. R., Ly, D. Q., & Gershaneck, K. (2021). Taxing micro, small and medium enterprises in Yogyakarta: Regulation and compliance. Bestuur, 9(1), 43–52. https://doi.org/10.20961/bestuur.v9i1.49184
  32. Ogembo, D. (2020). Taxation of self-employed professionals in Africa: Three lessons from a Kenyan case study. https://ssrn.com/abstract=3801878
  33. Peprah, C., Abdulai, I., & Agyemang-Duah, W. (2020). Compliance with income tax administration among micro, small and medium enterprises in Ghana. Cogent Economics and Finance, 8(1), 1–25. https://doi.org/10.1080/23322039.2020.1782074
  34. Rana, G., & Choudhary, R. (2006). Micro small and medium scale enterprises-"hidden and helping hand in economic growth". http://www.dnb.co.in/SME_cluster_series2012_Indor
  35. Saad, B. (2017). Analisis pengaruh kesadaran membayar pajak, pengetahuan dan pemahaman peraturan perpajakan, dan pemeriksaan pajak terhadap kemauan membayar pajak WPOP di KPP Pratama DKI Jakarta. JRAA, 4(2), 13–29.
  36. Shafer, W. E., & Simmons, R. S. (2008). Social responsibility, machiavellianism and tax avoidance: A study of Hong Kong tax professionals. Accounting, Auditing and Accountability Journal, 21(5), 695–720. https://doi.org/10.1108/09513570810872978
  37. Silaen, C. (2015). Pengaruh sistem perpajakan, diskriminasi, teknologi dan informasi perpajakan terhadap persepsi wajib pajak mengenai etika penggelapan pajak (tax evasion). Jom Fekon, 2(2), 1–15.
  38. Snow, A., & Warren, R. S. (2007). Audit uncertainty, bayesian updating, and tax evasion. Public Finance Review, 35(5), 555–571. https://doi.org/10.1177/1091142107299609
  39. Sofiamanan, N. Z., Machmuddah, Z., & T. A. H., N. (2023). Profitability, capital intensity, and company size against tax avoidance with leverage as an intervening variable. Journal of Applied Accounting and Taxation Article History, 8(1), 21–29.
  40. Sutrisno, & Konde, Y. T. (2022). Pengaruh tax amnesty, self assessment system dan keadilan pajak terhadap persepsi wajib pajak atas tindakan penggelapan pajak pada wajib pajak orang pribadi di kota Samarinda. AKUNTABEL: Jurnal Akuntansi Dan Keuangan, 19(3), 701–713.
  41. Widuri, R., Devina, D., Marta, F., & Wati, Y. (2019). The influence of penalties, the trust on authorities, and the tax audit toward tax compliance. Journal of Economics and Business, 2(2), 218–229. https://doi.org/10.31014/aior.1992.02.02.81