Determining the Level of Tax Awareness and Factors Affecting Tax Compliance of Ready-to-Wear Businesses in Solano, Nueva Vizcaya 3709

Abstract

The paper explored the intricacies of tax awareness and compliance among Ready-to-Wear (RTW) businesses that fall under the category of micro enterprises in Solano, Nueva Vizcaya, Philippines. The study employed theories of compliance and awareness as its conceptual framework, aiming to identify the factors that influence tax compliance and awareness among these businesses. It considered various demographic variables such as age, educational attainment, gender, and years in business operation as potential influencers. The study utilized a descriptive-comparative research design and collected data through a survey questionnaire. The findings indicate that the respondents have a high level of awareness of their tax rights and responsibilities, particularly regarding issuing receipts and invoices. However, they may need more understanding of tax return filing dates and timely tax payments. The factors influencing tax compliance include fines and penalties, the probability of being audited, financial constraints, tax knowledge, and peer influence. Non-compliance reasons include unawareness of laws, financial burden, and high tax rates. Recommendations include simplifying procedures, reducing tax rates, and improving tax education through socialization efforts. The study also highlights the importance of fines and penalties in promoting tax compliance. The paper is significant not just for tax authorities but also for the businesses themselves, offering them a clearer understanding of the importance of tax compliance and the implications of non-compliance. Overall, the paper serves as a multi-faceted exploration into the realm of taxation among micro enterprises, with a specific focus on the RTW businesses in Solano, Nueva Vizcaya.