Does Religiosity Improve Tax Compliance ? An empirical research based from gender

Religiosity and love of money plays an important role in determining individual compliance with tax regulations in developing countries. This research examines the influence of love of money and religiosity on tax evasion. In addition, it studies the relationship between love of money, religiosity, and tax evasion based from a gender. The research data were obtained from 8 private universities in Special Region of Yogyakarta with 207 samples and it uses convenience sampling. The number of samples was determined by convenience sampling method. Analysis data uses regression analysis. The results indicate that love of money has significant effect on tax evasion, while religiosity has no significant effect on tax evasion. There is significant difference between love of money and tax evasion from a gender perspective. The conclusion of this research is tax evasion in Indonesia determined by love of money and not given by religiosity. Moreover, sex is not an indicator in tax evasion and love of money.


INTRODUCTION
Business must be operated in accordance with the rules of regulation, legislation, politics, economy, social and ethics (Wati & Sudibyo, 2016).Ethical values must be enforced to reduce the occurrence of problems and disadvantages for various parties (Yeltsinta & Fuad, 2013).Ethics and principles of professionalism need to be applied in the world of education, especially for accounting students (Arshinta, Djasuli, & Rimawati, 2017).It is intended that students have the characteristics and ethical standards of the accounting profession before entering the work field (Novitasari & Sukirno, 2016).
The reveal of ethical violations such as tax evasion involving accountants has influenced to the decrease of public trust of accountant's integrity and professionalism (Aziz & Taman, 2015).The examples of tax evasion cases occurred in Indonesia is conducted by Gayus Tambunan in taking care of PT Metropolitan tax filling and three of Bakrie Group companies; PT Arutmin, PT Kaltim Prima Coal, and PT Bumi Resources.Another tax evasion case at PT Asian Agri with 14 sub companies proven not to pay taxes for four years (Kurniawati & Toly, 2015).The case is to be highlighted to the world of education that the content of ethics and professionalism are very crucial must be applied to students, especially accounting students (Basri, 2015).
Tax evasion cases involving accountants have declined public confidence in the integrity and professionalism of accountants (Aziz & Taman, 2015).Tax evasion is an important issue that inspires academic to teach accounting students ethics and character education (Basri, 2015).Some researchers have correlated taxation ethics with some variables; i.e. cultural differences (McGee, Ho, & Li, 2008); cultural environment and individual attitude (Pope & Mohdali, 2010) and money ethics (Lau, Choe, & Tan, 2013;Vitell, Singh, & Paolillo, 2007).The research on tax evasion is still interesting for the following reasons: First, tax evasion has an impact on a country's development.Second, a non-economic factor, such as religiosity, may affect tax evasion (Pope & Mohdali, 2010).Third, love of money can lead an individual to do a manipulation (Li-Ping Tang, Chen, & Sutarso, 2008).Fourth, the code of ethics to achieve a desired goal may vary between genders (Dreber & Johannesson, 2008;Hogue, Levashina, & Hang, 2013;Volkema, 2004).In addition to the above reasons, researches on tax evasion remain interesting because of previous result are inconsistent (Walker, Smither, & DeBode, 2012).Parboteeah, Hoegl, & Cullen, (2008) show that a relationship exists between religiosity and ethical behavior.While, Walker et al., (2012) and Clark & Dawson (1996) found a negative association and another study by Wong (2008) found a weak relationship.
Tax evasion is done by a person for personal gain.Tax evasion is an unethical practice to avoid paying taxes to gain personal advantage.The tax evasion behavior aims to reduce the tax burden even if it violates the tax laws (Utami & Widodo, 2015).It triggered by such factors as economy, psychology, religion, culture, as well as moral (Hafizhah & Basri, 2016;Pope & Mohdali, 2010).The objectives of this research were to examine the impact of love of money and religiosity on tax evasion.It also studies love of money, religiosity, and tax evasion from a gender point of view.The results are expected to contribute to the government in designing policies to prevent tax evasion.Moreover, they are also expected to provide inputs for academic in adopting ethical principles.The originality of this study is the difference in countries where research is conducted in Indonesia and previous research is widely outside Indonesia.
The theory of religiosity shows how far the knowledge and firm beliefs, and how diligent the implementation of worship and how the appreciation of religion by humans (Glock & Stark, 1965).This theory gives an understanding that the more religious one will lead to an increase in ethical values in running a life of society and will affect its behavior.Money is a means of daily needs fulfilment and motivation for a person, because money and income is a measure of one's success (Elias & Farag, 2010).Money is important for human life, to meet the needs and can be a measure of wealth.Money can be used as a means of payment, a unit of calculation, and a hoard of one's wealth.Money can be used universally, but the meaning and importance of money cannot be universally accepted.Interpretation of the importance of money differs from individual to individual and the need to study one's attitude toward money (Yeltsinta & Fuad, 2013).A person's attitude toward money is called the love of money associated with desired and undesirable organizational behavior (Aziz & Taman, 2015).Elias & Farag (2010) introduces the concept of "the love of money" is a person's subjective measurement of money.The love of money is about the wanted and unwanted behavior.Love of money is often called greed and the root of evil.Love of money is positively related to the tendency to behave unethically (Li-Ping Tang et al., 2008).This shows that someone who has high love of money places money as a top priority and does everything possible to earn money, including tax evasion (Basri, 2014).Love of money became one of the causes of corporate and government scandals (Vitell et al., 2007;Li-Ping Tang et al., 2008;and Singhapakdi, Vitell, Lee, Nisius, & Grace, 2013).
The love of money is an attitude that shows affection for money and considers it as the main thing in one's life.Previous researches indicate that if a person has an excessive attitude of love for money, then his ambition to earn money will be very high and, therefore, do everything possible to earn money, even though he should do unethical things like manipulation (Rindayanti & Budiarto, 2017).Love of money has an impact on unethical behaviors (Y.M. Basri, 2015;Singhapakdi et al., 2013;Tang, 2016;Aziz & Taman, 2015).The deeper the love for money, the higher the possibility that a person may commit to tax evasion.Based on the above results, we formulate the following hypothesis: H 1 : Love of money has a significant impact on tax evasion.
Religiosity is the principle, values, norms, and beliefs that a person holds toward religion (Parboteeah et al., 2008).The role of religiosity to determine a person fulfils tax obligations in developed or developing countries.This assumption that one's religious beliefs are applied in everyday life in varying degrees.A person with a high degree of religiosity is expected to have high moral values and vice versa (Pope & Mohdali, 2010).Ethical relationships with religiosity are like something of a roller coaster ride where the level of religiosity sometimes increases and sometimes decreases (Walker et al., 2012;Hood Jr, Hill, & Spilka, 2009).
Religiosity represents a strong adherence to the value of goodness in a person's religion.Both religion and belief in God have rules for behaving ethically in various aspects of life, including those in the business world (Wati & Sudibyo, 2016).The principles of religion underlie ethical values in work and in doing business.The relationship between religiosity and ethics is something of a "roller coaster" ride, where the religiosity can go up and down (Walker et al., 2012;Hood Jr, Hill, & Spilka, 2009).Walker et al. (2012) found weak association between an individual religiosity and his perception of ethics.On the other hand, Longenecker, McKinney, & Moore (2004) found strong relationship between religiosity and ethics.Based on the above description, we formulated the following hypothesis: H 2 : Religiosity has a significant impact on tax evasion According to Elias & Farag (2010) ethical perceptions are influenced by two factors: demography (gender, age and education level) and psychological (spiritual and locus of control).In childhood, men are accustomed to being taught rules, justice, and individual rights, while girls are accustomed to relationships, affection, and inclusiveness.This causes men to have a higher self-centered value, believing that goals can be achieve in various ways, tend to pursue success and stronger competitive qualities than women.This led to the general belief that women should be polite, and men should emphasize their achievements (Hogue et al., 2013).
Gender differentiates psychologically between men and women, known as gender stereotypes, which is, the belief that men and women are separate groups (Westbrook, Steven Arendall, & Padelford, 2011).Gender comprises of feminine and masculine characteristics: the former is more sensitive to others while the latter is perceived as risk-taker and competitive.Feminine more shows love, warmth, tenderness, sympathy, and sensitive to others.Masculine is inversely proportional to feminine with a risk-taking nature, "competitive rough-housing", attracted to "inanimate objects", firm and independent (Sommers, 2003).Previous research found that perception on ethics differs between men and women.Women are better on ethics while men ignore ethics to get what they want (Hogue et al., 2013).
The love of money is an attitude that shows fondness for money.A person with high love of money orientation tends to do unethical things, being materialistic, and involved in corruption and tax evasion.Love of money is employ in this study because it is part of ethics, that represent the best measure to determine the level of love of money orientation in various types of literature (Tang & Chen, 2008).The results of previous researches indicate that gender differences exist in the love of money orientation (Rindayanti & Budiarto, 2017).Furthermore, other researches indicate that men tend to be more courage to do tax evasion than women (Tang & Chen, 2008).Based on the above review, we formulate the following hypotheses:

METHOD
This research is a quantitative research with primary data.The sample of this study consists of accounting students registered in 8 private universities in Yogyakarta Special Region.Data were obtained by means of questionnaire distributed to undergraduate students of accounting program by using convenience sampling method.The number of samples target in this research were 100 respondents, it has already meets with the rule of thumb which stated that the sample size should be several times (preferable 10 times or more) as larger as number of variables in this studies (Sekaran and Bougie, 2016).This research use three variables that accordance with the theory that minimum sample size is 30 (3*10).The questionnaires were distributed in 3 phases: 99 were distributed to accounting students in private universities accredited with A grade, 81 to those accredited with B grade, and the rest 44 to those accredited with C grade.The questionnaires returned amount to 224.Of these, 207 (92.4%) can be analyzed, 17 (7.6%)can't be analyzed because the responses are incomplete, as can be seen in Table 1.Tax evasion represents the dependent variable measured based on 3 perspectives: 1) tax evasion is unethical, 2) tax evasion could sometime be ethical, and 3) tax evasion is an ethical thing to do (McGee & Preobragenskaya, 2006).Tax evasion is measured using 15 questions on 7 point Likert scale (strongly disagree [1] to strongly agree [7]).
Love of money is the affection for money to motivate individual to become rich.Love of money is measured using 4 indicators: money as the measure of success, money as the motivation, money as a symbol of trust, and money as the most important thing (Tang & Chen, 2008;Singhapakdi et al., 2013).It is measured with 18 questions on 7 point Likert scale (strongly disagree [1] to strongly agree [7]).
Religiosity expresses the belief in God and in religious values a person embraced.Religiosity reflects a person behavior; the higher his religiosity level, the better his behavior.It is measured with 20 questions divided into two parts: 1) intrinsic religiosity with personal indicators such as unselfishness, relevance to life, appreciation of belief, keeping faith, association, and ultimate.2) Extrinsic religiosity with institutional indicators such as: selfishness, compartmental, instrumental, communal, attention to the peripheral and causal development of faith (Basri, 2015).Intrinsic religiosity is measured with 12 questions and extrinsic religiosity with 8 questions on 7 point Likert scale (strongly disagree [1] to strongly agree [7]).
Gender variable is employ in this study to examine whether there were differences in perceptions on religiosity, love of money, and tax evasion.Gender is measured with dummy variable, where 1 stands for men and 0 for women (Hafizhah & Basri, 2016).The data in this study were analyzed using multiple regressions.

RESULTS AND DISCUSSION
Validity and reliability tests were performed on the instrument in this research.Valid instruments generate valid measurement tools used to obtain data.Validity is defines as the extent to which the instrument measures what it purports to measure.In this study, testing the validity measured by the p value on the results of Pearson product moment, the instrument is valid if the p value < 0.05.By valid instrument we mean that it can be used to measure what it is supposed to measure (Sugiyono, 2010).The validity testing indicate that all of the variables: love of money, religiosity, and tax evasion, are valid (p value < 0.05).Validity test for all of variables can be seen in Table 2, Table 3 and Table 4.The result of the validity test showed that the variable of Love of money showed that the result in Table 2 showed significant result which could be seen from the person correlation.Reliability is defines as the extent to which a questionnaire, test, observation or any measurement procedure produces the same results on repeated trials.Reliable instruments are those that can be used multiple times to measure the same object and produce similar scores.In short, it is the stability or consistency of scores over time.The results of reliability test (Table 5) indicate that all variables in this study had cronbach alpha greater than 0.6.While hypothesis testing for H 1 and H 2 was performed to determine the impact of love of money and religiosity on tax evasion (Table 6), hypothesis testing for H 3 was performed to examine whether gender differences exist between love of money religiosity and tax evasion (Table 7).Table 6 shows that love of money has an impact on tax evasion with p value 0.014 (<0.05), which would mean that the higher the level of love of money orientation, the higher the ethical perception on tax evasion (Y.M. Basri, 2015).Table 6 indicates that religiosity has no significant effect on tax evasion, with p value 0.237 (>0.05).Source: primary data processed, 2017; * significant < 5%, ** significant <1% Table 7 shows p value for love of money is 0.020 < 0.05 and tax evasion is 0.000 < 0.05, which means that H 3a and H 3c are supported.Table 7 shows that no differences exist between men and women in determining the level of religiosity.The p value for religiosity is 0.802 > 0.05, which means that H 3b is rejected.The analysis of respondents' answers yields a median value of 5.24 for religiosity and median value of 4.00 on the 7 point of likert scale.The analysis further indicates that the questionnaire items have below average values, such as the item "Sometimes I agree and feel the need to consider my religious beliefs to protect my social and economic well-being" has a mean value of 4.23 below the overall average value, i.e. 5.24.This indicates that respondents' perception of religiosity remains lower than that of welfare.Tax evasion has a mean value of 2.70, indicating that students' perception of ethics is considerably good.The analysis of the item "tax evasion is ethical provided that most of the money collected is spent on projects that benefit me" has a mean value of 2.43, meaning that the respondents are strongly disagree with tax evasion.
This finding consistent with previous research (Vitell et al., 2007;Lau et al., 2013) describing that a person motivated by money and put a top priority on becoming rich tends to consider tax evasion as common practice.A person with high level of love of money orientation will do everything to fulfil his need, disregarding the common rules applicable (Tang & Chiu, 2003;Tripermata, 2016).The results of this study prove that the respondent has the assumption if the money held is a measure of one's success.In addition to being used for daily needs, money is a motivational tool for someone to have power.The more money you have then the success of someone will be more real so that the attitude of love of money will encourage someone to take action against the law.This finding consistent with the previous research, where no feasible measurement and theory for religiosity.Like a "roller-coaster" the religiosity level of a person can go up and down.In addition, a person may consider his job as more important than other thing, as it can improve his welfare (Weaver & Agle, 2002;Parboteeah et al., 2008;Walker et al., 2012).
The results of previous research explain that there is a close relationship between religiosity with ethical behavior because religiosity produces norms that will limit a person in behaving incorrectly.However, the findings of this study suggest that religiosity has no effect on tax evasion, although it is negatively effect.A person who has a low degree of religiosity tends not to violate the law, otherwise someone who has high religiosity tends to violate the law.Some legal cases involving State officials in Indonesia are real examples proving that religiosity has no effect on tax evasion.Some of the big cases involve someone who has a high religiosity, but has a low ethics that violates the law.The results of interviews with respondents show that the level of public confidence in the management of funds derived from taxes is still low.Respondents feel that there is still injustice and still consider that fraud or tax evasion is usual happen.
Men have similarities in ethical behavior when they work due, among other things, to environmental factors, job demands, and organizational culture that require a professional person to have the same ethical perceptions, regardless of men and women (Westbrook et al., 2011).Most people, both men and women, will put their moral integrity above all else (Pope & Mohdali, 2010).Therefore, a person which have high level of religiosity tend to uphold ethical norms (Walker et al., 2012).In general, women maintain higher standard of ethics than men; the latter are more likely to do tax evasion to gain what they want (Volkema, 2004;Dreber & Johannesson, 2008;Hogue et al., 2013).Men tend to put higher priority on money because they have to earn their living as family breadwinner and are ambitious to gain position or power (Basri, 2014).

CONCLUSION
From data analysis, we conclude that love of money has a significant impact on tax evasion.On the other hand, religiosity has no significant impact on tax evasion.Furthermore, while gender differences exist between the level of love of money orientation and tax evasion, no gender differences were found in the level of religiosity.Limitations of this study are: first, it employed a quantitative research questionnaire.For future researches, it would be better if qualitative method is also employed with in-depth interview to obtain cleared picture on the situation and condition (Pope & Mohdali, 2010).Second, the present research does not study perception of ethics based on age.We recommended future researches to include age, as it affects individual decision in analyzing ethics (Walker et al., 2012).Third, the research does not include spiritual experience as part of religiosity.Therefore, we recommend future researches to include spiritual experience because ethical behaviors are not only about right or wrong, but also about personal spiritual experience to accept the truth (Sidani & Al Ariss, 2015).

H 3a :
There is different perception on love of money based from gender H 3b : There is different perception on religiosity based from gender Does Religiosity Improve Tax Compliance?An empirical research based from gender Dekeng Setyo Budiarto, Yennisa, Rohmyati Widyaningrum H 3c : There is different perception on tax evasion based from gender

Table 1 .
Description of Respondents

Table 2 .
Results of validity test for Love of money

Table 3 .
Results of validity test for religiosity

Table 4 .
Results of validity test for tax evasion

Table 5 .
Results of reliability test Source: primary data processed, 2017

Table 6 .
Results of t test (for H 1 and H 2 )

Table 7 .
Results of independent-samples t test