Sirs and madams, thank you for your smile today. If a smile, other than serving as alms, can be used to pay taxes, Indonesia will surely be full of people who like to smile like you!

Perhaps, the tax-paying compliance tests may be less stressful if the interactions therein can grapple with humorous matters.

Why humor? As stated by Stanford University professor and gelology initiator (the scientific study of laughter), William F. Fry, not only will humor reduce physical tension, but also psychological tension.

Further, Stanford Graduate School of Business lecturers, Dr. Jennifer Aaker and Naomi Bagdonas in their book Humor, Seriously (2021) also prove that humor is positively correlated to increasing trust.

As such, the humor strategy is relevant to be adapted in our world of taxation. As humor can support the grand idea of the modern taxation paradigm that has been implemented by many countries, i.e. cooperative compliance.

According to the OECD, cooperative compliance refers to a relationship based on cooperation between the authorities and taxpayers. It is supported by three main pillars that accommodate values such as democracy and respect for taxpayers’ rights: transparency, understanding, and mutual trust (Darussalam, Septriadi, Kristiaji, & Vissaro, 2019).

Due to the importance of the trust factor, the Director of the OECD Centre for Tax Policy and Administration Pascal Saint-Amans even emphasizes that “tax is all about trust”. According to him, it is imperative that tax officials establish trust-based positive relationships.

In another literature, i.e. a study of the relationship between the tax authorities and taxpayers in Austria, it is found that a factor, in fact, plays an important role and is considered more humanistic than the power-based approach, namely implicit trust.

In comparison to reason-based trust, implicit trust can be established from treatments that are not, by any means, connected to tax-related hard skills.

In its application, implicit trust can be initiated through the trivial things, like the design of official document, friendly voice intonation, or putting a smile on the face (Gangl, Hartl, Hofmann, & Kirchler, 2019).

The momentum of 2020 Annual Tax Return compliance ratio, which has reached 76,86% or improved from the previous year, is ideal to further intensify cooperative compliance. It is expected that the quality of formal compliance can be in line with material compliance.

Learning from studies of other countries, the paradigm shift towards cooperative compliance may be initiated from the authorities’ desire to improve their relations with their taxpayers.

One example is breaking down barriers between the authorities and taxpayers, which until now still tend to be revenue-oriented.

With the ongoing pandemic and the current adoption of information technology in which tax returns are filed online, encouraging taxpayers to pay taxes voluntarily and based on trust is even more challenging. Trust, on the other hand, constitutes an emotional aspect that is difficult to establish, except through humanistic interactions or emotional aspects.

Humor as support

In the United States, even corporation as huge as Microsoft or institution as powerful as the FBI have called on Andrew Tarvin, a humor coach, to provide training on how to implement humor in the workplace for their internal teams.

It is highly likely for our tax authorities to adopt Tarvin’s strategy to encourage the ability to communicate using humor, so as to facilitate the big idea of cooperative compliance. Which strategy should be employed? Humor perspective.

The humor perspective in this context is not an activity of cracking jokes but a new perspective to conduct routine things that tend to be outdated. One form of application is embracing smiles and even laughter in the interaction between the authorities and taxpayers.

Would the humorous and ‘not serious’ impression make tax officials lose their authority? Apparently not. Instead, the priority should not be maintaining authority, but rather pleasant communication to build a trust-based relationship.

In his book Humor That Works (2019), Tarvin claims that dialogues spiced with smiles and laughter can emotionally and psychologically bond relationships. Henceforth, a sense of comfort to share arises, thus, creating a sense of trust between the already familiar parties. The ultimate goal, of course, is to facilitate the implementation of cooperative compliance.

Conceptually, humor perspective can be presented through practical communication strategies. Tarvin, among others, recommends livening up the dialogues with questions that can spark the passion of the interlocutor.

For instance, instead of asking formal questions to taxpayers, such as “What business do you run to earn income?”, why not try “What innovations have you made recently, Sir/Ma’am?”.

When the information exchange process occurs from such a trivial interaction, the seeds of implicit trust in the interaction between the authorities and taxpayers have begun to spread. Later, the reaping may take various forms, i.e. taxpayers’ cooperation in providing the required information in a timely manner.

As such, does the initiative to establish taxpayers’ trust end here? Paradoxically, trust is very difficult to establish. Trust is hard to build, and yet easy to collapse.

For this reason, the tax authorities need to repeat their behaviors to continue to build taxpayers’ trust while being supported by adequate soft skills to maintain it, such as communication and negotiation techniques also the ability to empathize.

It rings true that sole reliance on humor perspective in carrying out the noble duty as the tax authorities while enforcing cooperative compliance is impossible. The role of humor perspective here, however, may support the tax authorities’ technical expertise to provide a different approach than just relying on power, as recommended by the United Nations in Practical Manual on Transfer Pricing for Developing Countries (2021).

Next, when the combination of technical expertise and soft skills supported by humor perspective is applied, the authorities will collaborate with taxpayers to move towards a new relationship, from a basic relationship characterized by a low level of mutual trust to an enhanced relationship or what is now frequently referred to as cooperative compliance with a sense of deeper mutual trust (Owens, 2012).

Trust in cooperative compliance, in essence, acts like a key to open two doors at once, i.e. with trust in the community, cooperative compliance can be implemented more comprehensively.

The result is not only increased compliance, but also a decline in the level of disputes. As the number of disputes is reduced, taxpayers will have more trust in the authorities, leading to more optimal tax revenues.

*This article is based on discussions with Danny Septriadi (DDTC tax practitioner). The author can be contacted via e-mail address: ulwanfn@gmail.com.

https://news.ddtc.co.id/strategi-humor-dalam-meningkatkan-kepercayaan-wajib-pajak-30529

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