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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

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.

Suggested Citation

  • Iskandar, Deden Dinar & Wuenscher, Tobias, 2012. "Finding the Stronger Impact among Bribery, Financial Reward, and Religious Attitude: The Insights of Experiment on Environmental Tax Compliance in Indonesia," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124316, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare12:124316
    DOI: 10.22004/ag.econ.124316
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