IBU CONSULTING AS A TAX CONSULTANT IN BALI: LOCUS OF CONTROL MODERATING THE INFLUENCE OF INTELLECTUAL, EMOTIONAL, AND SPIRITUAL INTELLIGENCE ON ETHICAL DECISIONS

LOCUS OF CONTROL MODERATES THE INFLUENCE OF INTELLECTUAL, EMOTIONAL, AND SPIRITUAL INTELLIGENCE ON THE ETHICAL DECISIONS OF TAX CONSULTANTS IN BALI

Based on Article 1 Paragraph 1 of the KUP Law Number 28 of 2007, tax is a compulsory contribution to the state that individuals or entities owe if they are obliged to do so by law, without receiving any direct reward. The revenue generated is used for state purposes that aim to promote the prosperity of the people. The Head of the Bali Regional Office of the Directorate General of Taxes (Regional Office of DJP = Direktorat Jenderal Pajak) said that welcoming the last quarter of 2020 had recorded a tax revenue realization of IDR 6.212 trillion or 68.83% of the revenue target of IDR 9.024 trillion. The revenue realization of the Bali DJP Regional Office this year experienced a negative growth of -27.72% compared to the previous year’s revenue realization.

Taxpayers’ compliance with tax payments in Bali is still notably inadequate. Due to their insufficient knowledge of the relevant tax regulations, taxpayers rely on tax consultants for guidance whilst fulfilling their tax obligations. Consequently, the tax consultant profession in Bali has become crucial. Notably, tax consultancy is a profession that delivers advisory services to individuals or businesses regarding their tax responsibilities. The field of tax consultancy is rife with ethical problems, as it frequently confronts ethical dilemmas that compromise professionalism. Numerous cases, such as the Gayus Tambunan scandal and several others, have arisen wherein certain tax professionals have abetted taxpayers in committing fraudulent activities. The ethical quandary encountered by tax officials prompts them to make unprincipled choices since the financial incentives are significant.

Taxpayers’ compliance with tax payments in Bali is still notably inadequate. Due to their insufficient knowledge of the relevant tax regulations, taxpayers rely on tax consultants for guidance whilst fulfilling their tax obligations. Consequently, the tax consultant profession in Bali has become crucial. Notably, tax consultancy is a profession that delivers advisory services to individuals or businesses regarding their tax responsibilities. The field of tax consultancy is rife with ethical problems, as it frequently confronts ethical dilemmas that compromise professionalism. Numerous cases, such as the Gayus Tambunan scandal and several others, have arisen wherein certain tax professionals have abetted taxpayers in committing fraudulent activities. The ethical quandary encountered by tax officials prompts them to make unprincipled choices since the financial incentives are significant.

Tax consultants have a set of ethical guidelines to ensure they maintain their independence, professionalism and integrity while carrying out their duties. The Code of Ethics of the Indonesian Tax Consultants Association (IKPI= Ikatan Konsultan Pajak Indonesia) provides a moral compass for all IKPI members to think, behave and act accordingly. Each member must maintain a professional image by strictly adhering to the IKPI Code of Ethics. Ethics is closely tied to the fundamental relationship between individuals, which guides their moral actions. The IKPI code of ethics addresses the relationship issues between tax consultants and taxpayers and emphasizes the importance of integrity, dignity, and honor in carrying out one’s profession. It also highlights the need for tax consultants to maintain a professional bearing while at work. A tax consultant, who conducts business in accordance with the ethical code, can be influenced by three factors – individual, organizational, and psychological. Within the scope of individual factors, intellectual intelligence, emotional intelligence, and spiritual intelligence play important roles. Intellectual intelligence, also known as cognitive intelligence, refers to an individual’s mental capacity to quickly and accurately solve problems and adapt to new environments. It plays an important role in personal and professional development. If an individual possesses a strong intellectual intellect, they will be capable of comprehending and executing their responsibilities proficiently, leading to favorable performance outcomes. Emotional intelligence grows in significance as job complexity increases since mismanaged emotions can hinder the cognitive capabilities of otherwise intelligent individuals. Insufficient emotional intelligence can limit a person’s ability to perform at their maximum potential. If an individual possesses a strong intellectual intelligence, they will be able to understand and carry out their tasks very well, and the implication is that their performance will be good. Emotional intelligence grows in significance as job complexity increases since mismanaged emotions can hinder the cognitive capabilities of otherwise intelligent individuals. Without emotional intelligence, a person cannot use their cognitive abilities to their fullest potential. Similarly, as a tax advisor, emotional intelligence is necessary to aid in conducting consultations and audits accurately examining the truthfulness of tax reports made by clients.

Spiritual intelligence is the ability to confront and resolve issues related to the meaning and significance of human behavior and existence within a wider framework. This skill enables a person to connect both intrapersonal and interpersonal aspects and traverse any gaps between oneself and others. A tax consultant with good emotional and spiritual intelligence is able to act or behave ethically in his profession and in his organization. If a tax consultant lacks spiritual abilities, they may behave improperly and engage in fraudulent activities. On the other hand, individuals with high spiritual intelligence possess strong principles and vision, enabling them to interpret all aspects of life and cope with hardships.

In the field of tax consulting, a tax consultant must possess integrity and honesty to maintain objectivity. A consultant may be tempted to be dishonest in order to gain greater rewards from clients. Therefore, in order to function effectively in terms of intellectual and emotional intelligence, spiritual intelligence is a fundamental requirement. Spiritual intelligence has the ability to blend the other two intelligences, namely intellectual and emotional intelligence. The role of a tax consultant demands knowledge, analysis, and rational thinking to arrive at decisions for clients. Tax consultants encounter multiple problems and challenges in the workplace, including demands from tasks and relationship issues with clients and colleagues. These problems necessitate not only intellectual abilities, but also emotional abilities or emotional intelligence to solve them effectively. If a tax consultant possesses high emotional intelligence, they will be better equipped to make informed decisions when handling such problems. However, possessing high intellectual intelligence alone is insufficient if the person cannot control it. The ability to control intellectual intelligence is known as locus of control.

Locus of control refers to the tendency to attribute the perception of an event or outcome in an individual’s life either to him or her or to help from sources outside of him or her in which he or she has little role, such as luck, fate, or the help of others. Locus of Control encompasses two types, namely internal and external. An individual who possesses an internal locus of control believes that they have the ability to steer their own fate. Those with an external locus of control believe that their environment holds the power to control their fate. They perceive that luck, power, and influence from outside sources may have a stronger impact on their life and results than their own actions. This can lead to a lack of responsibility for the consequences of their ethical or unethical behavior, as they feel more connected to external forces. Someone who possesses an internal locus of control takes greater responsibility for the outcomes of their actions. Moreover, they establish their own standards of right and wrong conduct.

Intellectual, emotional and spiritual intelligence can significantly impact the ethical decisions made by tax consultants in Bali. The ethicality of these decisions can be heightened further if Bali’s regional tax consultants demonstrate an internal locus of control. In the profession of Tax Consulting, every factor is interconnected and affects decision-making.

Author: Ni Kadek Lilis Hestia Dewi (Student of Bali State Polytechnic who had been done the field work practice at IBU Consulting).