The Mediating Role of Tax Compliance in the Relationship Between Carbon Tax and Environmental Performance: A Public Sector Study

Nedi Hendri; Fajar Gustiawaty  Dewi; Khairudin Khairudin

doi:10.14414/tiar.v16i1.5566

Vol. 16 No. 1 (2026), Articles

Vol. 16 No. 1 (2026)

The Mediating Role of Tax Compliance in the Relationship Between Carbon Tax and Environmental Performance: A Public Sector Study

Articles

DOI: 10.14414/tiar.v16i1.5566

Published 2026-04-21

Nedi Hendri⁺⁻
Fajar Gustiawaty Dewi⁺⁻
Khairudin Khairudin⁺⁻

Nedi Hendri

Universitas Muhammadiyah Metro

https://orcid.org/0000-0002-8844-9800

Fajar Gustiawaty Dewi

Universitas Lampung

https://orcid.org/0000-0002-9959-937X

Khairudin Khairudin

Universitas Bandar Lampung

https://orcid.org/0000-0001-6265-6281

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Keywords

carbon tax
environmental performance
mediation analysis
public sector
tax compliance

How to Cite

Hendri, Nedi, et al. “The Mediating Role of Tax Compliance in the Relationship Between Carbon Tax and Environmental Performance: A Public Sector Study”. The Indonesian Accounting Review, vol. 16, no. 1, Apr. 2026, pp. 1-14, https://doi.org/10.14414/tiar.v16i1.5566.

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Abstract

This study examines the mediating role of tax compliance in the relationship between carbon tax and environmental performance in the public sector of Indonesia. The implementation of carbon tax, aimed at reducing greenhouse gas emissions, faces challenges in Indonesia due to low tax compliance, potentially undermining its effectiveness. A total of 318 participants from public sector organizations in Indonesia were selected using random sampling for this study. Data were collected through an online survey, designed to measure tax compliance, carbon tax, and environmental performance. The results indicate that tax compliance significantly mediates and moderates the relationship between carbon tax and environmental performance, highlighting the importance of improving tax compliance to enhance the effectiveness of carbon tax policies. This study provides empirical evidence on the critical role of tax compliance in maximizing the environmental benefits of carbon taxes in developing countries like Indonesia, where tax culture and enforcement systems are still evolving. The findings contribute to the literature on carbon taxation by emphasizing the need for fostering compliance to ensure the success of environmental tax policies.

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The Mediating Role of Tax Compliance in the Relationship Between Carbon Tax and Environmental Performance: A Public Sector Study

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