CORETAX DISRUPTION AND MSME TAX COMPLIANCE PSYCHOLOGY IN WEST NUSA TENGGARA

Abstract

This study investigates the psychological determinants of tax compliance among individual Micro, Small, and Medium Enterprise (MSME) taxpayers in West Nusa Tenggara Province during the implementation of Indonesia's Coretax Administration System. Drawing on the Slippery Slope Framework, Theory of Planned Behavior, Technology Acceptance Model, and Nudge Theory, the study examines how digital literacy, algorithm trust, and nudge technology shape MSME tax compliance in a disrupted digital tax environment. A quantitative explanatory design was applied using 185 valid responses collected from MSME taxpayers who had experience with e-Filing or Coretax. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4.0. The findings show that digital literacy has a positive and significant effect on tax compliance, while algorithm trust emerges as the strongest determinant of voluntary compliance. Nudge technology does not directly influence compliance, indicating that digital reminders and choice-architecture features require prior trust in the system to become behaviorally effective. The study contributes to digital tax compliance literature by emphasizing algorithm trust as a critical psychological mechanism in modern tax administration and offers practical implications for improving Coretax interface reliability, taxpayer digital literacy, and trust-based behavioral interventions.