The Influence of Education Level and Understanding of Tax Payment Mechanism on the Taxpayer Compliance in the MSME of the South Jakarta – DKI Jakarta

Abstract

This study aims to examine the effect of Education Level and Understanding on Tax Payment Mechanism on Taxpayer Compliance of Small and Medium Enterpreneurs. This research is a kind of quantitative research using primary data. The population of this study was small and medium enterprises registered at the Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia in South Jakarta -DKI Jakarta. Probability sampling method was used with the total samples of 99 respondents and SPSS 24 application was applied for the statistical analysis. The results of this study show that the level of education has rejected the impact on the Taxpayer Compliance of Small and Medium Enterpreneurs. Understanding of the Tax Payment Mechanism is partially significant to the Taxpayer Compliance of Small and Medium Enterpreneurs. Simultaneously, the variables of Education Level and the taxpayer's understanding on tax payment mechanism have a significant effect on Taxpayer Compliance of Small and Medium Enterpreneur.

Managerial ability in founding-family firms: evidence from Indonesia

“…Indonesia is the country where the major economic' development comes from the family business. About 82% of Indonesian gross domestic product is contributed by 90% family business (Susanto et al , 2007). In Indonesia, mostly family contributions in the firm act as owners or involved in management.…”

“…In the USA, founding-family firms contribute 62% of gross domestic product (Shanker and Astrachan, 1996), while in Europe, most larger businesses are founding-family firms (Astrachan and Shanker, 2003). Susanto and Wijanarko (2007) report that 82% of Indonesian gross domestic product are contributed by 90% of listed founding-family firms. Also, 16.6% of all listed firms in the Indonesian Stock Exchange is controlled by founding-family shareholders (Claessens et al , 2000; Demsetz and Lehn, 1985; Demsetz and Villalonga, 2001; Himmelberg et al , 1999).…”

Tax Compliance in Indonesian MSMEs: Key Factors Explored

“…Knowing taxation allows MSMEs to understand tax obligations' rules and regulations, enabling them to fulfill these obligations accurately and on time (Dewi & Supadmi, 2019). Moreover, tax knowledge stills a sense of responsibility and awareness among MSMEs regarding their tax obligations and the consequences of non-compliance (Susanto et al, 2020). As a result, MSMEs with a higher level of tax knowledge are more likely to comply with their tax obligations than those with limited or no tax knowledge (Lestari & Daito, 2020).…”

“…On the other hand, it can be argued that the level of tax knowledge does not necessarily directly correlate with tax compliance among MSMEs in Indonesia. Some MSMEs may have a high level of tax knowledge but still choose to evade taxes due to various reasons, such as distrust in the government's utilization of tax revenue, complex and burdensome tax processes, or simply being unable to afford the taxes (Susanto et al, 2020). Additionally, the lack of resources and access to tax experts or consultants may also hinder MSMEs from fully understanding and complying with the tax regulations, regardless of their level of tax knowledge (Nasution et al, 2020).…”

The Effect of Taxpayer Awareness, Tax Services, Value Added Tax Understanding on Corporate Taxpayer Payment Compliance

“…However, what happens is that there are still many potential taxpayers who have not been registered as actual taxpayers (Handayani & Noviari, 2016). The issue of how to understand and comply with taxes itself has become an important issue in Indonesia because if taxpayers do not understand and do not comply, it can lead to a desire to take tax evasion and neglect, which in turn can harm the state due to reduced tax revenues (Susanto et al, 2020).…”