Dodik Juliardi, Darusalam, Jamaliah Said, Triadi Agung Sudarto
This study examines the impact of tax understanding on tax compliance among Indonesian MSMEs, considering the mediating and moderating role of compliance costs. Drawing on deterrence theory, the research employs structural equation modeling (SEM-PLS) to analyze survey data collected from 500 MSMEs using purposive sampling. The findings reveal a significant direct effect of tax understanding on tax compliance and compliance costs. Moreover, compliance costs are found to mediate the relationship between tax understanding and tax compliance, suggesting that higher tax understanding leads to lower compliance costs, which in turn enhances tax compliance. The study contributes to the literature by providing insights into the complex interplay between tax understanding, compliance costs, and tax compliance in the context of MSMEs in Indonesia. The findings have important implications for policymakers and tax authorities in designing strategies to improve tax compliance among MSMEs. © 2024, Success Culture Press. All rights reserved.
Universitas Negeri Malang, Indonesia; Accounting Research Institute, Universiti Teknologi Mara, Malaysia
