Factors Influencing SME Tax Compliance: Evidence from Indonesia

Fany Inasius

International Journal of Public Administration, 2019, vol. 42, issue 5, 367-379

Abstract: This study examines factors influencing the tax compliance of small-and medium-sized enterprises (SMEs) for income-tax reporting requirements in Indonesia. Using multiple regressions, six tax compliance factors are examined. Data were collected through a survey conducted in Jakarta using 328 respondents who are small business taxpayers. A researcher–administered questionnaire survey method was used for data collection. The results reveal that referral groups, the probability of audit, tax knowledge, and the perception of equity and fairness have a significant impact on tax compliance. In particular, the referral group had the most significant influence on the noncompliance behavior of SME taxpayers. These findings can enable policymakers to develop future tax policies that focus on tax compliance. This study also contributes to the literature by including observations from Asian countries.

Date: 2019
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DOI: 10.1080/01900692.2018.1464578

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