Understanding Taxpayer Compliance of MSMEs in Makassar City during the Pandemic through Determinant of Tax Rate and Tax Understanding

Abstract

This study aims to identify and analyze the influence of tax rates and tax understanding on tax compliance among SMEs in Makassar City. This is crucial considering the economic conditions impacted by the COVID-19 pandemic, where SMEs are among the most vulnerable sectors. Data for this research were obtained from 391 MSMEs in Makassar City who were willing to participate as respondents. This will provide valuable insights for future practitioners in designing more effective and sustainable tax strategies for SMEs. The research employed primary data through direct field research, providing an in-depth understanding of the challenges faced by SMEs in fulfilling their tax obligations. It is hoped that the findings of this research will make a significant contribution to tax practitioners and decision-makers in designing more targeted policies to support SMEs' sustainability in this uncertain time. The results indicate that tax rates have a positive and significant effect on tax compliance, as well as tax understanding having a positive and significant influence on tax compliance when viewed partially. It is important to continue raising awareness about the importance of tax compliance among all stakeholders, whether through public campaigns, seminars, or workshops. Such awareness initiatives can enhance the understanding of the importance of paying taxes accurately and on time.