Trust and power in digital tax compliance: Evidence from E-commerce

Abstract

This study examines how trust in tax authorities and perceived power influence voluntary and enforced tax compliance among Indonesia's e-commerce taxpayers, a fast-growing yet underexplored group in the digital economy. Grounded in the Slippery Slope Framework (SSF), the study analyzes survey data from 419 e-commerce taxpayers using hierarchical regression analysis. The results indicate that trust in tax authorities is a strong positive predictor of voluntary tax compliance (p < 0.01), whereas perceived power shows a weaker positive association (p < 0.10). The interaction between trust and perceived power is negative and marginally significant (p < 0.10), suggesting that stronger enforcement may weaken the positive effect of trust on voluntary compliance. Regarding enforced tax compliance, trust is negatively associated with enforced compliance (p < 0.01), while perceived power exhibits a positive and statistically significant relationship with enforced compliance (p < 0.01). Demographic factors such as income, age, and education also exhibit differentiated associations with compliance behavior. While the study does not directly measure digital system characteristics, the findings highlight the importance of trust-based governance in digital taxation contexts. Policy implications emphasize the need for balanced compliance strategies that combine institutional trust and appropriate enforcement to support sustainable tax compliance in emerging digital economies.