The Effect of Tax Incentives and Tax Socialization on MSME Taxpayer Compliance with Financial Conditions as Moderating Variables (Case Study at KPP Pratama Gianyar)

Aresia, Putu Nandari and Utthavi, Wayan Hesadijaya and Ayuni, Ni Wayan Dewinta (2022) The Effect of Tax Incentives and Tax Socialization on MSME Taxpayer Compliance with Financial Conditions as Moderating Variables (Case Study at KPP Pratama Gianyar). Repository Politeknik Negeri Bali.

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Abstract

The weakening financial condition of MSME due to the Covid-19 pandemic has led to a decrease in the obedient behav-ior of taxpayers in fulfilling their tax obligations. In response to this situation, the government issued a policy of provid-ing tax incentives for MSMEs taxpayers affected by the Covid-19 pandemic with the aim to reduce the tax expense, so as to improve taxpayer compliance. To be able to convey the update information regarding policies, regulations, and other information about taxation, it is necessary to carry out tax socialization activities by the tax authorities and other relevant agencies, so that taxpayers will always comply with their tax obligations. This research aims to examine the effect of tax incentives and tax socialization on MSMEs taxpayer compliance with fi-nancial conditions as a moderating variable. This research was conducted at KPP Pratama Gianyar, with uses primary data sources in the form of questionnaires distributed to 100 MSMEs taxpayers listed at KPP Pratama Gianyar. Testing the variables of this research using the Structural Evaluation Model – Partial Least Square (SEM PLS) method with the SmartPLS 3.0 application. The results of this research indicate that: (1) tax incentives has a positive and significant effect on MSME taxpayer com-pliance, (2) tax socialization has a positive and significant effect on MSME taxpayer compliance, (3) financial conditions can moderate the nature of weakening the effect of tax incentives on MSME taxpayer compliance. Keywords: tax incentives, tax socialization, MSME taxpayer compliance, financial conditions

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