Does procedural justice in a tax audit situation affect taxpayers’ acceptance of tax audit assessments?

This study examines the effects of procedural justice and authority power on corporate taxpayers’ decisions to accept tax audit assessments via an experiment related to a hypothetical tax audit. We find that authority power but not procedural justice increases corporate taxpayers’ acceptance of tax authority decisions in a tax audit situation. However, when authority power is low, there is a significant effect of procedural justice in a tax audit on taxpayers’ aggressiveness in their decisions to accept tax audit assessments. According to the results, a combination of policy measures that enhance procedural justice and traditional deterrence measures warrants consideration to increase overall corporate tax compliance.