The Moderating Role of Tax Morale in the Era of Artificial Intelligence

Abstract

This study investigates the moderating function of tax morale and the impact of perceived artificial intelligence (AI) competence in tax administration on tax evasion intention. This study using primary data collected through a five-point Likert-scale questionnaire from 199 corporate taxpayers selected through purposive sampling and data were analyzed using SmartPLS to test the direct and moderating effects. The findings demonstrate that tax evasion intention is negatively and significantly impacted by perceived AI competence, meaning that taxpayers who believe AI-based tax administration to be more capable typically have fewer intents to engage in tax evasion. This research implies that taxpayers' perceived risk of detection may rise due to AI's anticipated capacity to improve tax violation detection and monitoring, deterring tax evasion intentions. However, tax morale does not significantly moderate the relationship between perceived AI capability and tax evasion intention, indicating that the deterrent effect of perceived AI capability does not vary significantly across levels of tax morale. By using taxpayers' perceptions of AI capabilities to explain tax related behavioral intentions, the findings expand the integration of the Theory of Planned Behavior (TPB) and Technology Acceptance Model (TAM). Practically, improving the transparency, reliability, and perceived effectiveness of AI-enabled tax administration may help deter tax evasion intentions. By investigating perceived AI capabilities in Coretax enabled tax administration as a behavioral factor of tax evasion intention and assessing the moderating influence of tax morale, this study builds on earlier studies.