Tax justice and understanding: MSME compliance with Tax Regulation No. 55/2022 in Surabaya, Indonesia

Muhammad Arsalan Khan and Heru Tjaraka

Cogent Business & Management, 2024, vol. 11, issue 1, 2396042

Abstract: This research investigates the impact of tax justice perception and tax understanding on the compliance of Small and Medium-sized Enterprises (SMEs) with government regulation Number 55, 2022, in Surabaya. The study, conducted at KPP Pratama Surabaya Wonocolo employs a quantitative approach, with primary data gathered from 120 SME taxpayers through questionnaires. Data analysis is performed using SPSS version 22, using multiple linear regression, coefficient of determination, F test, and t-test. Results indicate that both the perception of tax justice and understanding of taxes positively influence SME taxpayers’ compliance in Surabaya. Additionally, when considered simultaneously, these factors collectively impact the compliance of SME taxpayers with government regulation Number 55, 2022. The findings suggest that fostering a sense of tax justice perception and enhancing tax understanding among SMEs in Surabaya can significantly contribute to improving their compliance with government regulations. The research focused exclusively on SME taxpayers registered with KPP Pratama Surabaya Wonocolo, a subset under the Directorate General of Taxation East Java Regional Office 1. While this selection was based on the office’s consistently high number of taxpayers, future studies within this domain should consider these inherent limitations. The originality of our research lies in its focus on the specific context of Surabaya, Indonesia, and its investigation into the impact of tax justice perception and tax understanding on the compliance of Small and Medium-sized Enterprises (SMEs) with government regulation Number 55, 2022. The research addresses the recent regulatory changes in Tax Law No. 55 of 2022, which specifically targets Micro, Small, and Medium Enterprises (MSMEs).

Date: 2024
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DOI: 10.1080/23311975.2024.2396042

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