Tax morality and patriotism under public fiscal reform: Evidence from Indonesian MSMES

Type of the article: Research ArticleAbstractThe effectiveness of public tax reform in improving tax compliance is shaped not only by institutional and administrative factors, but also by social and humanitarian conditions. This study analyzes how morality and patriotism influence tax compliance within the context of public tax reform in Indonesia, and investigates whether political connections moderate these relationships. The sample consists of 401 MSME taxpayers in Java; convenience random sampling techniques were used from July to August 2025. MSMEs are an intriguing subject in tax compliance because they make a large contribution to national GDP, but their level of tax compliance is relatively low. Using a hierarchical linear regression for data analysis, the findings show that morality has a significantly positive effect on tax compliance with a positive beta (0.0471 for non-CTAS and 0.540 for CTAS group), a p-value of 0.000, and an increase in the R2 value (ΔR²: 0.222 for non-CTAS and 0.219 for CTAS group). Patriotism significantly affects tax compliance with a beta of 0.453, a p-value of 0.000, and an increase in the R2 value of 0.105 only in the non-CTAS group. Political connections act more as the main determinant rather than as a moderating variable. The results suggest that public tax reform should not rely solely on technological upgrades; it must also reinforce the moral and civic foundations of taxation. Sustainable compliance can be achieved only when system improvements are accompanied by greater public trust and taxpayer morality.AcknowledgmentThis paper was funded by the Directorate General of Research and Development, Ministry of Higher Education, Science and Technology of the Republic of Indonesia in 2025 with the National Competitive Fundamental Research Grant scheme.