The Effect of Implementing Self-Assessment System on Tax Compliance for Small-Medium Enterprises (SMEs), Lembang, West Bandung District

Abstract

Small-Medium Enterprises (SMEs) play a vital role in economic development of Indonesia. To support its economic development, the government is obliged to generate revenue. In order to generate more revenue, Indonesian government implemented self- assessment system in compliance with tax obligations. Most of the SMEs are compliant while some are not that aware of it because of lack of socialization. The aim of this study is to comprehend the effect of implementing self-assessment system on tax compliance. This study focused on SMEs in Lembang, West Java, Indonesia. It was exploratory research based on data were gathered from West Java Regency Office. Questionnaires were distributed to 70 (based on Slovin formula) respondents from the total population of 244. The result showed that the correlation of implementation of self-assessment system on tax compliance is weak, thus, the findings showed that implementation of self-assessment system has no significant influence on tax compliance. Implementation of self-assessment system has no significant influence on tax compliance. There are several reasons for this, such as, most of the people around the district of Lembang are not yet fully aware about its implementation. Also, it is not well socialized by the tax authorities from the Revenue Offices. It lacks personnel to do the socialization. The stated reasons were affirmed during the interview with the Head of SMEs located in West Bandung Regency. Implementation of the self-assessment System is worth to grab by SMEs in the district of Lembang, Bandung, Indonesia. It is highly recommended to socialize again the implementation and assign personnel that can extend time and effort to socialization.