The Process of Promoting Employee Voluntary Tax Compliance in a Regulatory Alteration

The study examines the mediating effect of trust on the relationship between procedural fairness and voluntary tax compliance among employees required to report underpaid tax returns due to a regulatory change. This study surveys employees of a state university in Central Java, Indonesia. Our sample comprises 165 employees. The results suggest that procedural fairness and trust in authorities play crucial roles in promoting voluntary tax compliance. This study also reveals the complementary and partial mediation effect of trust on the relationship between procedural fairness and voluntary tax compliance. This study is the first to investigate the process of achieving voluntary tax compliance among employees in a regulatory-alteration context in a developing country. This study highlights the importance of tax authorities moving beyond the traditional compliance model by building trust through fair treatment when seeking to encourage honest tax reporting among employees.