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The Effect of Tax Socialization, Tax Understanding, and Tax Sanctions on Taxpayer Compliance With Tax Awareness as a Moderating Variable: Evidence From Individual Taxpayers at Medan Polonia Tax Office

In: Proceedings of the International Conference on Economics, Business, Management and Accounting (ICEBesMA 2025)

Author

Listed:
  • Eva Siahaan

    (Universitas Prima Indonesia, Faculty of Economics and PUI Finance and Sociotechnopreneurship)

  • Aremi Evanta Tarigan

    (Universitas Prima Indonesia, Faculty of Economics and PUI Finance and Sociotechnopreneurship)

  • Enda Noviyanti Simorangkir

    (Universitas Prima Indonesia, Faculty of Economics and PUI Finance and Sociotechnopreneurship)

  • Nagian Toni

    (Universitas Prima Indonesia, Faculty of Economics and PUI Finance and Sociotechnopreneurship)

  • Galumbang Hutagalung

    (Universitas Prima Indonesia, Faculty of Economics and PUI Finance and Sociotechnopreneurship)

Abstract

This study aims to examine the influence of tax socialization, tax understanding, and tax sanctions on taxpayer compliance, with tax awareness as a moderating variable. The research is motivated by the importance of improving tax revenue, which heavily depends on taxpayer compliance. A quantitative approach was applied by distributing questionnaires to 300 individual taxpayers registered at the Medan Polonia Tax Office. Data were analyzed using Partial Least Square–Structural Equation Modeling (PLS-SEM). The findings indicate that tax socialization, tax understanding, and tax sanctions positively and significantly affect taxpayer compliance. Furthermore, tax awareness successfully mediates the effect of tax socialization and tax sanctions on compliance but does not mediate the effect of tax understanding. These results highlight the critical role of taxpayer awareness in strengthening compliance behavior. The study provides practical implications for tax authorities to enhance socialization strategies, ensure fair sanction enforcement, and foster tax awareness as a key factor in achieving higher taxpayer compliance in Indonesia.

Suggested Citation

  • Eva Siahaan & Aremi Evanta Tarigan & Enda Noviyanti Simorangkir & Nagian Toni & Galumbang Hutagalung, 2025. "The Effect of Tax Socialization, Tax Understanding, and Tax Sanctions on Taxpayer Compliance With Tax Awareness as a Moderating Variable: Evidence From Individual Taxpayers at Medan Polonia Tax Office," Advances in Economics, Business and Management Research, in: Enda Noviyanti Simorangkir & Fajar Rezeki Ananda Lubis (ed.), Proceedings of the International Conference on Economics, Business, Management and Accounting (ICEBesMA 2025), pages 314-324, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-960-5_24
    DOI: 10.2991/978-94-6463-960-5_24
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