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Abstract
This study examines taxpayer considerations to fulfill their obligations since law
enforcement and tax administration improvement were not adequate to explain the
gap between actual tax and its target. A survey was conducted to hotel, restaurant
and tourist destination managers in Bandung since one-third of local taxes derived
from the tourism sector. We use a probit model to clarify the influence of religious
activities, trust in government institutions, public services, people's pride, prodemocratic
attitude, to taxpayer morality. The study concludes that taxpayers in the
tourism sector have a higher local tax morality than central tax morality and only the
public services which have a consistent and significant impact on both tax moralities.
The local governments and central government can develop improved strategies to
increase revenue from tourism sector by providing better public service, which
directly or indirectly enhances the tourism sector performance.