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Finding the Stronger Impact among Bribery, Financial Reward, and Religious Attitude: The Insights of Experiment on Environmental Tax Compliance in Indonesia

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  • Iskandar, Deden Dinar
  • Wuenscher, Tobias
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    Abstract

    The degradation of environmental quality has been one of the main concerns in Indonesia. The government has mentioned the environmental tax as the instrument of environmental management; however, the primary potential problem will be the issue of compliance. Inspired by the situation in Indonesia, this study is expected to contribute on environmental regulation and tax compliance literatures by examining and comparing the impact of bribery, financial reward, and religious attitude on compliance in a developing country where the bribery prevails. The study employs laboratory experiment approach. The results indicate that bribery has the strongest impact; the presence of bribery significantly worsens the compliance. Financial reward enhances the compliance only if the bribery is curbed, while religious attitude has no significant impact.

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    Bibliographic Info

    Paper provided by Australian Agricultural and Resource Economics Society in its series 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia with number 124316.

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    Date of creation: Feb 2012
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    Handle: RePEc:ags:aare12:124316

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    Related research

    Keywords: Environmental tax; compliance; laboratory experiment; Environmental Economics and Policy; Public Economics;

    This paper has been announced in the following NEP Reports:

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