Compliance Cost and Officer’s Supervision on MSME’s Tax Compliance Moderated by Tax System Modernization

Abstract

Background: One of the primary sources of revenue for the state is taxes. This money will be used by the government to pay for a range of costs, including as fuel subsidies, finance for national development, and other general government expenses. The state will be able to manage a tax-supported administrative infrastructure as a result. The official assessment system and the self-assessment system are the two different types of tax collection techniques. Aim: The researcher would like to analyze compliance cost and officer’s supervision on MSME’s tax compliance moderated by tax system modernization. Method: The design of this study utilizes a causal research design to empirically test the effect of tax compliance costs and supervision by tax officers regarding individual taxpayer compliance and use moderation variables of tax system modernization. The research approach is quantitative with an explanatory design. The data collection technique that researchers use is a survey with a questionnaire. Findings: Tax Compliance Cost (X1) has a negative and significant effect on Taxpayer Compliance (Y). Supervision from the Tax Officer (X2) has a positive and significant effect on Taxpayer Compliance (Y). Moderating Effect of Tax Expense Has a positive and insignificant effect on Taxpayer Compliance (Y). Moderating Effect Supervision from Tax Officers has a positive and significant effect on Taxpayer Compliance (Y). Tax Modernization (Z) has a positive and significant effect on Taxpayer Compliance (Y).