Analyzing Ethnic Chinese Tax Evasion Behavior from Ethical and Government Trust Perspectives

This study seeks to identify the determinants of tax evasion among MSMEs owned by Ethnic Chinese in the DI Yogyakarta region. The ethnic diversity in Indonesia may foster divergent perspectives on taxation, posing challenges in the enforcement of tax legislation. This study employs Structural Equation Modelling (SEM) for data analysis. This study surveyed 80 respondents from Ethnic Chinese MSMEs, revealing that trust in the government and patriotism do not influence tax evasion intentions, however ethics do impact tax evasion intentions, and faith in the government can enhance patriotism. While trust in government may enhance patriotism, patriotism alone is insufficient to diminish intents of tax cheating. This study demonstrates that an individual's choice to engage in tax fraud is shaped by their internal moral principles rather than external perceptions of achievement