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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.