Assessing the Effectiveness of Tax Incentives and Their Impact on Stimulating Economic Growth

Isayev, Asliddin

doi:10.55439/eced/vol24_iss2/a36

Cited by 1 publication

(1 citation statement)

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“…Governments frequently employ tax incentives to encourage compliance and spur expansion in micro, small, and medium-sized businesses (MSMEs) (LE et al, 2020). However, variables including administrative complexity, MSMEs' awareness, and incentive program transparency might affect how successful these incentives are (Isayev, 2023). To optimize their influence on economic activities and compliance, tax incentives must be tailored to the distinct features of various industries (Chusumastuti et al, 2023;Irmayani et al, 2023).…”

Section: Tax Incentives and Msme Compliancementioning

confidence: 99%

Analyzing the Impact of Tax Policy on Financial Performance and Compliance of MSMEs in Indonesia

Sumiok

2023

ijat

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The complex relationship between tax policy components and the financial performance of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia is examined in this study. A survey was conducted with a sample of 250 MSMEs to capture different industry types, firm sizes, and geographical regions. The study assessed the relationship between tax rates, tax incentives, firm size, industry type, and financial performance indicators using Structural Equation Modeling with Partial Least Squares (SEM-PLS). The structural model yielded important insights, while the measurement model demonstrated good validity and reliability. As lower profitability correlates with higher tax rates, policymakers should consider the tax burden of MSMEs. On the other hand, tax incentives show a good correlation with financial performance, suggesting that they may be useful in encouraging MSME expansion. The complex interaction between firm size industry type and financial performance is highlighted. The SEM-PLS model fits the data well, according to the model fit assessment. To support the sustainable expansion of MSMEs in Indonesia, policymakers and MSME owners can benefit from the results of this study, which has practical implications such as for the Government is the present policies need to be evaluated in order to improve MSME compliance. Meanwhile, it is important for MSMEs to improve their competencies such as financial literacy.

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Section: Tax Incentives and Msme Compliancementioning

confidence: 99%

Analyzing the Impact of Tax Policy on Financial Performance and Compliance of MSMEs in Indonesia

Sumiok

2023

ijat

View full text Add to dashboard Cite

show abstract

Assessing the Effectiveness of Tax Incentives and Their Impact on Stimulating Economic Growth

Cited by 1 publication

References 14 publications

Analyzing the Impact of Tax Policy on Financial Performance and Compliance of MSMEs in Indonesia

Analyzing the Impact of Tax Policy on Financial Performance and Compliance of MSMEs in Indonesia

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