Level Of Tax Compliance Research Articles

Financial Literacy and Tax Compliance by Medium, Small and Micro Enterprises in Nairobi City County, Kenya

Kenya Revenue Authority (KRA) has on numerous occasions failed to meet its revenue collection targets. Discord in tax compliance between Kenya taxpayers and collectors has been highly witnessed. Most SMEs engage in rampant tax evasion hence this study sought to establish effect of financial literacy on SMEs tax compliance level with a nucleus on the effect of budgeting, financial forecasting, credit management and investment diversification. Four critical theories of knowledge-based view, theory of planned behaviour, dynamic capabilities theory and contingencies theory fastened the research. A correlational research design was employed. 190 SMEs was sampled from the population of 846 manufacturing SMEs registered with KAM. Employing a semi-structured questionnaire, primary data was gathered. It was established that budgeting, financial forecasting, credit management and investment diversification had a positive notable effect on tax compliance. A budget was concluded to curtail SMEs expenditures and ensure tax compliance is on track for the future, accurate financial forecasts enable businesses to identify potential market risks and opportunities, there by facilitating better decision-making, effective credit management plays a crucial role in sustaining a healthy cash flow, minimizing financial risks, and building strong customer relationships. Additionally, investment diversification enables SMEs to attract new clients without requiring significant investments in additional personnel or resources. The study recommends that the SMEs should keep their budgeting flexible for better business results and veracity. The SMEs should project future sales by analysing market trends, historical performance, and other influencing factors. SMEs should properly define their credit management process and head for overseeing credit management and enforcing payment terms including handling late payments. SMEs could also benefit from establishing their own virtual mutual fund by investing in a selection of trusted companies that they regularly engage with in their daily operations.

Tax System Optimization: A Comparative Analysis Between Personal Income Tax and Corporate Income Tax in Indonesia

This study adopts a qualitative approach to analyze the comparison between Personal Income Tax (PPh) and Corporate Income Tax (PPh Corporate) in Indonesia. Through literature studies and observations, this study explores the tariff structure, tax relief, and tax compliance level of the two tax systems. The economic implications of the implementation of Income Tax and Corporate Income Tax on economic growth, investment, and income distribution were also discussed. The findings show that tax reform, as stated in the Law on Harmonization of Tax Regulations (UU HPP), has a significant impact in improving the effectiveness and fairness of the tax system. The results of this study provide in-depth insights into the importance of appropriate tax policies to support inclusive and sustainable economic growth in Indonesia.

Residential income tax compliance in Nepal: An empirical analysis

Tax compliance is the determining factor in tax report submission, enhancing tax awareness. A low level of tax compliance (TC) directly affects the government revenue and low inflow of information regarding taxpayers. This study uses descriptive and explanatory research approaches to identify determinants of residential rental income tax compliances (TC) among property owners in Kathmandu Metropolitan City, Nepal. A total of 1,129 structured questionnaires were distributed among the households of Kathmandu Valley for the cross-sectional and primary data, and only 500 (44.29 percent) useful responses were received from the respondents as the population was unknown. The response rate exceeds the estimated sample size of 384. The findings revealed a significant positive impact of tax rate on tax compliances (r = 0.329**, P<0.05). Fines and penalty (FP) and tax compliance (TC) found a positive and significant association depicting (r =.398**, P<0.05). Similarly, there was a positive and significant relationship (r = .612**, P<0.05) between attitudes and perception (AP) and tax compliance (TC). Moreover, a positive and significant association was found (r =.410**, P<0.05) between tax knowledge (TK) and tax compliance (TC). Furthermore, tax policy (TP) was positively and significantly associated (r = .440**, P<0.05) with tax compliance (TC). This study enhances taxpayers’ knowledge and helps to execute the policies to increase the efficiency and transparency of the tax system in Nepal. Acknowledgment The authors would like to express their gratitude to Prof. Dr. Achyut Gnawali and Mr. Prem Bahadur Budhathoki, Associate Professor, and Dr. Gangaram Bishowakarma, Assistant Professor of Tribhuvan University, Kathmandu, Nepal, for extending warm support towards the research work through the academic inputs.

Reporting of Individual Taxpayer Annual Returns with E-Filling for Employees

The tax socialization activity at PT. Medikarya Utama aimed to enhance employees' understanding and awareness of filing Individual Taxpayer Annual Returns (SPT) through the E-Filing system. E-Filing, an electronic service provided by the Directorate General of Taxes (DJP), offers convenience and efficiency in tax reporting. This activity was held at PT. Medikarya Utama, Cicurug, Sukabumi, involving all company employees. The results showed improvements in tax literacy, technical understanding of E-Filing, and tax compliance levels. Additionally, the program boosted employees’ confidence in independently filing their taxes. However, some challenges were identified, such as limited digital literacy and technology access among certain employees. To address these issues, the company provided targeted assistance, intensive training, and adequate technological facilities at the workplace. This initiative not only positively impacted the employees but also demonstrated the company’s commitment to tax compliance and contributing to state revenue. By enhancing employees’ capacity to utilize E-Filing, PT. Medikarya Utama supports government efforts to promote digital transformation in taxation.

Building a Culture of Compliance: The Influence of Tax Socialization and Inclusion on Indonesian Micro, Small, and Medium Enterprises (MSMEs) Taxpayers

Taxes serve as the cornerstone of any nation's economic framework, functioning as both a regulatory mechanism and a primary source of government revenue. They are indispensable for managing taxpayer behavior, ensuring a steady stream of state income, and financing essential public services and infrastructure development. In Indonesia, the compliance of micro, small, and medium enterprises (MSMEs) is pivotal to the nation's fiscal well-being. This study delves into the factors that influence MSME taxpayer compliance, specifically focusing on the role of tax socialization, tax inclusion, and the involvement of tax volunteers. A quantitative research approach was adopted, involving the distribution of questionnaires to MSME taxpayers in Indonesia. The data collected was then analyzed using SPSS software to test the hypotheses regarding the impact of tax socialization, tax inclusion, and tax volunteers on taxpayer compliance. The findings of this study reveal that tax socialization and tax inclusion positively influence the level of tax compliance among Indonesian MSME taxpayers. Furthermore, the involvement of tax volunteers also has a positive impact on enhancing taxpayer compliance. This study underscores the importance of tax socialization and tax inclusion in fostering a culture of compliance among MSMEs in Indonesia. The positive role of tax volunteers in assisting taxpayers and promoting compliance is also highlighted. These findings have significant implications for tax authorities in their efforts to improve tax compliance rates and enhance revenue collection.

Effect of Social Norms on Turnover Tax Collection among Micro and Small Enterprises in Meru Town, Kenya

The turnover tax has achieved a significantly low level of tax compliance since its introduction. This research examines social norms' impact on turnover tax collection among Micro and Small Enterprises (MSEs) in Meru Town, Kenya. This study used the Theory of Planned Behavior (TPB) to evaluate the influence of social norms on tax compliance. An Analysis of 367 Micro and Small Enterprises (MSEs) revealed a statistically significant positive correlation between social norms and tax compliance (β = 0.149, p = 0.007). The report proposed promoting robust tax compliance standards and improving tax education programs via seminars and advertising.

Analisis Tingkat Kepatuhan Wajib Pajak Hotel di Kecamatan Rantepao

This research aims to analyze the level of hotel tax compliance in Rantepao District. This research aims to analyze the level of hotel tax compliance in Rantepao District. The research method used is a quantitative method with a sample of 4 hotels with the results of this research. This research shows that the level of hotel tax compliance in Rantepao District varies, with the majority of hotels showing good compliance, 75% of the hotels sampled in this research are categorized as compliant taxpayers because they fulfill their tax obligations well, demonstrate conformity of reporting, timeliness of payments, and completeness of dokuments in accordance with regulations and 25% are categorized as non-compliant taxpayers possibly due to a lack of understanding of the importance of tax comlpiance.

Tax Audit, Tax Penalty, Religiosity and Tax Compliance

The purpose of this paper was to investigate the impact of tax audit and tax penalty on tax compliance and examine the moderating effect of religiosity on the associations between tax audit and tax penalty with tax compliance in Pakistan. In this study, 400 questionnaires were distributed by using convenience sampling to actual as well as potential taxpayers of Pakistan, after which a total of 247 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS SEM) was devised using SmartPLS software to validate the measurement model and structural model and the predictive relevance of the study’s model. The findings showed that tax audit and tax penalty were positively associated with the level of tax compliance. They also demonstrated the moderating significant effect of religiosity on the relationship between tax penalty, tax audit and tax compliance. Tax authorities and policymakers in developing majority societies in developing countries and in other South Asian countries, especially in Pakistan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen revenue collection. This study extended the deterrence theory in the context of tax compliance by studying tax audit and tax penalty as well as the proposed moderating effect of religiosity in the purview of deterrence theory on tax compliance. The study explored the potential effect of these significant factors of tax compliance among actual as well as potential taxpayers in socio cultural context of Pakistan. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the above-mentioned relationships was also discussed.

ALTERNATIVE WAYS TO MANAGE COOPERATION IN TAX RELATIONS: CHALLENGES OF DIGITALIZATION AND TAX COMPLIANCE

The recent advancements in tax administration have witnessed a significant shift from traditional paper-based reporting to comprehensive digitalization of tax filing and analysis processes. The integration of information and communication technologies into tax relations, alongside the enhancement of tax systems through digital tools—such as electronic registration of tax invoices, electronic reporting, and electronic verification—has streamlined processes and improved tax compliance. However, it remains essential to investigate whether merely transitioning to electronic reporting suffices and to explore alternative management methods for interactions between businesses and regulatory authorities. This article aims to substantiate the patterns of change in tax relations due to the evolution of information technologies and to evaluate alternative options for ensuring the accuracy of tax reporting metrics, which could enhance tax compliance levels. Tax management, a subset of overall management, allows for the assessment and analysis of the impact of the tax environment on business operations amidst uncertainty. The challenges posed by the evolving tax landscape, including legislative volatility and subjective interpretations by regulatory bodies, necessitate a reevaluation of tax management practices. Furthermore, the increasing volume of data enables tax administrations to focus limited resources on addressing serious tax violations. This dynamic calls for a shift towards automation and digitization of accounting practices, paving the way for electronic audits. Despite the progress in electronic administration, the core criterion for tax compliance remains the submission of accurate tax reports and the fulfillment of tax obligations. The article discusses the OECD's recommendations for developing alternative cooperation frameworks between tax authorities and businesses, emphasizing the need for transparency and predictability in tax relations. In conclusion, successful transformation of tax relations between businesses and the state requires more than just electronic reporting; it necessitates a unified source of information for assessing tax risks and ensuring compliance. Ukraine is encouraged to adopt advanced practices for identifying tax risks and facilitating electronic tax audits, thereby enhancing the overall efficacy of tax administration

Social Norms, Perceptions, Taxpayer Behavior, Tax Digitalization and Taxpayer Compliance

Considering that the level of tax compliance is important for the country as outlined above, research is needed that can provide solutions to reducing and even eliminating the gap between the ideal conditions of taxpayer compliance and the reality on the ground. This study uses a quantitative research design. The quantitative instrument used was in the form of a questionnaire distributed to prospective respondents. The data was analyzed using SmartPLS software with SEM (Structural Equation Modelling) analysis techniques. This study uses purposive sampling in the determination of samples. Typical case sampling is used in this study, namely, prospective respondents are taxpayers who come directly to the tax office to report their tax returns even though at the time of reporting their tax returns at the tax office, they still use digital tax services such as e-filling or e-form. The results of this study show that three of the four research variables used have a significant effect on taxpayer compliance. For future researchers, there is still a lot of room to continue research that explores other factors that affect the relationship between attitudes to behaviour, social norms and perception of behavioural control towards taxpayer compliance in the hope that the results can be used in efforts to improve tax compliance.

Pengaruh Pemahaman Perpajakan, Kesadaran Wajib Pajak Dan Kemauan Membayar Pajak Terhadap Kepatuhan Wajib Pajak Pelaku UMKM

This study aims to gain comprehensive insights into the impact of tax literacy, taxpayer awareness, and willingness to pay taxes on tax compliance among Small and Medium Enterprises (SMEs). Employing a quantitative methodology, the research involved sixty respondents who underwent an outlier process to complete a questionnaire. Data analysis encompassed descriptive statistics, classical assumption tests, and hypothesis testing. The findings indicate that tax comprehension has a significant influence on SME tax compliance, both partially and simultaneously. However, taxpayer awareness and willingness to pay taxes did not demonstrate a substantial effect on tax compliance levels within the SME sector.

Non-sanction sources of an effective fiscal system interms of tax compliance: tax morale and mentality, taxjustice, trust in the tax apparatus and its activities

The article presents the results of the author’s empirical social research on non-sanction sources of tax complianceof a natural person (an individual taxpayer). This concept is understood as conscious and intentional compliancewith tax law and meeting the requirements of tax law. The fundamental assumption is the discovery,proven by behavioral economics, that in a tax state under democratic conditions, people pay taxes not only becauseof state compulsion. A fiscal system that is effective in terms of tax compliance is a system in which as manytaxpayers as possible consciously and intentionally comply with tax law and meet the requirements of tax law.The article presents the level of tax compliance among adult Poles as well as the level of forced and voluntarycompliance determined in our own empirical research. Then, the following non-sanction determinants of a citizen’swillingness to make tax payments were presented: tax morale, lack of experience of unintentional tax error, attitudetowards tax compliance, religiosity, tax mentality, perception of the structure of taxes as fair, perception of thefunctioning of the tax apparatus for the common good, trust in the tax apparatus.

Analisis Pengetahuan dan Tingkat Kepatuhan Wajib Pajak Pengusaha Marketplace di Kalangan Generasi Z

The purpose of this research is to analyze the knowledge and level of tax compliance of marketplace entrepreneurs in Generation Z. Researchers use qualitative methods with an interpretive paradigm. Data collection was carried out through interviews by exploring the perspectives of four Generation Z people, who are individual MSME taxpayers, have been marketplace entrepreneurs for at least 2 years, and have a turnover of under IDR 500 million per year. The research results showed that in the sample studied, no one knew about the tax obligations for the online business they ran. Even though they were only required to report taxes without paying, none of the research subjects fulfilled their obligations. The reasons for this behavior vary, starting from the perception that the tax reporting process is complicated and burdensome. busy running an online business. The view that online businesses do not experience direct benefits from tax contributions like offline businesses. Changes regarding tax regulations for online businesses and the behavior of non-compliant co-workers also influence their non-compliance. The suggestion for the marketplace is to require every seller to deposit proof of tax report every year. Meanwhile, the suggestion for the government is to provide tax education to MSME business actors who operate online.

Nhân tố ảnh hưởng đến tuân thủ quy định về hóa đơn điện tử của doanh nghiệp tại Vĩnh Long

The article analyzes the factors affecting compliance with regulations on e-invoices of enterprises in Vinh Long province. The study uses a multiple regression model estimated with Ordinary Least Square method to estimate the factors affecting compliance with regulations on e-invoices through survey results from 268 enterprises using e-invoices. The research results show that there are 6 factors affecting the compliance with regulations on e-invoices of enterprises, the influence levels of the factors are arranged in descending order as follows: tax policy, economic perception, perception of barriers to conversion, perception of society, corporate characteristics and perception of behavioral control. In which, the awareness factor of conversion barriers has a negative impact, while the remaining factors have a positive impact on compliance with regulations on e-invoices. From the above results, the study proposes policy implications that contribute to improving the level of tax compliance with regulations on e-invoices at enterprises in Vinh Long province in the coming time.

Tax Audit and Tax Compliance, Does Religiosity Moderate?

The purpose of this paper was to investigate the impact of tax audit on tax compliance and examine the moderating effect of religiosity on the associations between tax audit and tax compliance in Pakistan. In this study, 400 questionnaires were distributed by using convenience sampling to actual as well as potential taxpayers of Pakistan, after which a total of 247 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS SEM) was devised using SmartPLS 3 to validate the measurement model and structural model and the predictive relevance of the study’s model. The findings showed that tax audit was positively associated with the level of tax compliance. They also demonstrated significant moderating effect of religiosity on the relationship between tax audit and tax compliance. Tax authorities and policymakers in developing majority societies in developing countries and in other South Asian countries, especially in Pakistan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen revenue collection. This study extended the deterrence theory in the context of tax compliance by studying the effect of tax audit on tax compliance as well as the proposed moderating effect of religiosity in the purview of deterrence theory on tax compliance. The study explored the said relationships among actual as well as potential taxpayers in socio-cultural context of Pakistan. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the above-mentioned relationships was also discussed.

Determinants of PBB P-2 Compliance Level in Kendit Village, Kendit District, Situbondo District

Tax literacy is the ability to understand and access tax regulations, this means dealing with taxpayers who have knowledge, awareness and tax compliance. Compliance with the payment of Land and Building Tax in Kendit Village, Kendit District, Situbondo Regency, in this village there is still a lack of public awareness regarding PBB payments. This is proven by the need to be reminded of awareness regarding the time for PBB payments by the village which is enforced by the hamlet head of each hamlet, but when reminded they immediately pay. The first aim of this research is to find out the factors that influence the level of tax compliance literacy on taxpayer compliance. Earth and Buildings. Second, to find out the factors that influence Land and Building Taxpayers. The methodology used in this research is Tax Compliance theory. Tax complaints can be identified from tax compliance in registration, tax compliance in returning notification letters, tax compliance in calculating and paying unpaid taxes and tax compliance in settling arrears. So a Tax Complaint is when a taxpayer fulfills his or her tax obligations and rights. By using hypothesis testing with a significant value of 0.04 to test the findings, it is established that the degree of education affects the factors that determine the literacy level of Land and Building Tax compliance. This study's hypothesis testing with a significant value of 0.45 demonstrates how socioeconomic status affects the factors that determine the literacy level of Land and Building Tax compliance. Hypothesis testing with a significant value of 0.001 in this study demonstrates that taxpayer compliance impacts the factors that determine the literacy level of Land and Building Tax compliance. Through hypothesis testing, this study demonstrates that tax fines have an impact on the factors that determine the literacy level of Land and Building Tax compliance, with a significant value of 0.023. The study's conclusion, which is based on the data examining the effects of socioeconomic status, education level, taxpayer compliance, and tax sanctions on the compliance literacy of P2 Land and Building Taxpayers in Kendit Village, Kendit District, Situbondo Regency, demonstrates that compliance literacy levels rise in direct proportion to socioeconomic status, education level, taxpayer compliance, and tax sanctions.

The Impact of Islamic Economics Principles on the Tax Compliance Payment Entertainment Policy

Surakarta City Government has established various entertainment tax rate policies; however, entertainment taxpayers must still comply with these policies. This research examines and analyzes the impact of Islamic economics principles on the tax compliance payment entertainment policy. This research is normative research equipped with interviews. This research uses descriptive secondary data. The research results show that, first, the level of tax compliance in paying massage parlor and SPA entertainment taxes in Surakarta City differs from Islamic economics principles. At the same time, the causal factor is the minimal participation of taxpayers in formulating entertainment tax rate policies. Second, the Surkarta City government has a role in increasing tax compliance in massage parlors. SPA Entertainment is maximizing the imposition of sanctions, supervision, outreach, and providing applications that make tax services easier.

Pentingnya Pemahaman Dasar-Dasar Perpajakan Dalam Meningkatkan Kepatuhan Wajib Pajak

Taxpayer compliance plays an important role in supporting state financing. The amount of state revenue from taxes will be greatly influenced by the level of tax compliance. This study aims to conceptually examine the importance of basic understanding in enhancing taxpayer compliance for the public. From various studies available, it is concluded that tax compliance can have a significant role in improving the welfare of society. This research utilizes a qualitative method. The data used in this study are both secondary and primary data.

Factors Influencing Electronic Tax Compliance Of Small and Medium-Sized Enterprises in Northern of Vietnam

The electronic tax service system - eTax in Vietnam is implemented as an administrative reform initiative of the tax industry to improve efficiency of the tax authorities. This research therefore sets out to examine the variables that impact firms’ compliance levels in the context of adopting electronic tax with a model that tests linear relationship between identified factors and tax compliance. Research data serving the study were collected from July to October 2023 from respondents working for small and medium-sized enterprises (SMEs) in Northern Vietnam with 200 valid questionnaires. Research findings reveal a positive relationship between The level of electronic tax application (AE), Tax policy - tax inspection & examination (TPTI) and The level of tax compliance (TC). Moreover, the level of adoption of electronic tax is positively influenced by Perceived ease of use (PEOU), Perceived usefulness (PU) and Information techonology skills (IT). Based on the research results, the study proposes appropriate recommendations to enhance the management mechanism and improve the tax compliance level of the SMEs in Northern Vietnam.

Teori Atribusi: Memahami Hubungan Kualitas Layanan, Pemahaman Perpajakan, Implementasi Sanksi dan Kepatuhan Pajak

Tax is a mandatory contribution made by citizens to the government in accordance with the provisions of the law, which is the largest source of income for the state. However, in Indonesia, there are still problems in tax activities, including low tax ratios and low levels of tax compliance. This research aims to investigate the influence of service quality, understanding of taxation, and implementation of sanctions on tax compliance in West Kalimantan Province. The research method used is quantitative with a multiple linear regression analysis approach using the help of the IBM SPSS program in processing the data. Primary data was collected through questionnaires distributed to people who have a Taxpayer Identification Number (NPWP) and regularly report Tax Returns (SPT) to the tax authority. The research results show that service quality does not have a significant effect on tax compliance, while understanding taxation and implementation of sanctions significantly influence tax compliance. The level of tax compliance can be increased by improving service quality, understanding of taxation, and the effectiveness of implementing sanctions. These findings provide valuable insights for tax authorities in improving tax compliance and increasing overall tax revenue.