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.
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Acknowledgments
The author acknowledges the financial support from Binus University and helpful encouragement from Professor Kenneth A. Merchant, University of Southern California. The author is also thankful to Editage (www.editage.com) for English language editing and Publication Support.
The blinded references used in the article are:
Author 1: Inasius, F. (2013). The implication of VAT regulation to tax revenues: The cases of small retailer in Indonesia. Binus Business Review, 4(1), 147–156. doi: 10.21512/bbr.v4i1.1043
Author 2: Inasius, F. (2015). Tax compliance of small and medium enterprises: Evidence from Indonesia. Accounting & Taxation, 7(1), 67–73.