Article Sidebar

Download
Full text PDF
Statistic
Read Counter : 286 Download : 168

Downloads

Download data is not yet available.

Main Article Content

Abstract

Recently, public opinion regarding tax avoidance has become unbreakable; and issues related to tax institutions are disrupting tax revenues. Tax avoidance leads to an issue that still requires resolution and is firmly entrenched among the business community in developed countries. The small and medium business sector refers to a sector that is involved in aggressive tax avoidance practices. Thus, tax can be accepted as a problem to achieve sustainability. This research applies a fiscal psychology theory approach with a survey approach on 150 MSME owners in Bandung City, West Java. The collected data was then analyzed using the Partial least squares approach to test and analyze the hypothesis. The results of this research show that tax knowledge and the tax incentives provided have a positive effect on the sustainable business performance of MSMEs in Bandung. Apart from that, this research also proves that tax attitudes are a determinant that can strengthen or weaken the relationship between tax knowledge and the tax incentives provided in achieving sustainable MSME business performance. It is hoped that the results of this research will add to the literature and expand the body of knowledge, especially in the context of taxation and business performance, and for practitioners, especially business owners. It can be a consideration that compliance in paying taxes is an essential factor in achieving business performance.

Keywords

Tax knowledge tax incentives tax attitudes sustainable MSME business performance

Article Details

License

Copyright (c) 2024 Jurnal Akuntansi dan Auditing Indonesia

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors who publish with this journal agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).

References

  1. Abdixhiku, L., Pugh, G., & Hashi, I. (2018). Business tax evasion in transition economies: a cross-country panel investigation. European Journal of Comparative Economics, 15(1), 11-36. Retrieved from https://ideas.repec.org/a/liu/liucej/v15y2018i1p11-36.html
  2. Agusti, R. R., & Rahman, A. F. (2023). Determinants of tax attitude in small and medium enterprises: evidence from Indonesia. Cogent Business and Management, 10(1). https://doi.org/10.1080/23311975.2022.2160585
  3. Albulescu, C. T., Tămăşilă, M., & Tăucean, I. M. (2016). Entrepreneurship, tax evasion and corruption in Europe. Procedia-Social and Behavioral Sciences, 221, 246-253. https://doi.org/10.1016/j.sbspro.2016.05.112
  4. Alshirah, M., Al-Dalabih, F., Magablih, A. M., Alsqour, M., Ali, B., Elkotayni, K., & Alshira’h, A. F. (2022). The relationship between tax knowledge and compliance: an empirical study. Information Sciences Letters, 11(5). https://doi.org/10.18576/isl/110508
  5. Andreansyah, F., & Farina, K. (2022). Analisis pengaruh insentif pajak, sanksi pajak dan pelayanan pajak terhadap kepatuhan wajib pajak umkm. Jesya, 5(2). https://doi.org/10.36778/jesya.v5i2.796
  6. Ardila, I., Febriaty, H., & Astuti, R. (2021). Strategi literasi keuangan sebagai faktor pendukung keberlanjutan usaha mikro kecil dan menengah. Jurnal Ilmu Ekonomi Dan Studi Pembangunan. doi : 10.30596/ekonomikawan.v%vi%i.8430
  7. Aribaba, F. O., Oladele, R., Ahmodu, A. L. O., & Yusuff, S. A. (2019). Tax policies and entrepreneurship sustainability in Ondo State, Nigeria. Journal of Global Entrepreneurship Research, 9(1), 53. doi : 10.1186/s40497-019-0168-0
  8. Azaka, L., & Balogun, S. K. (2022). Tax attitude and perception of fairness as predictors of tax compliance among sme business owners: the mediating role of tax knowledge. African Journal for the Psychological Studies of Social Issues, 25(3), 2022. Retrieved from http://www.ajpssi.org/index.php/ajpssi/article/view/563
  9. Barbosa, M. (2020). Sustainable strategic management (ges): sustainability in small business. Journal of Cleaner Production, 258. https://doi.org/10.1016/j.jclepro.2020.120880
  10. Bhalla, N., Sharma, R. K., & Kaur, I. (2022). Effect of tax knowledge and technological shift in tax system on business performance: a pls-sem analysis. Sustainability (Switzerland), 14(16), 1–18. https://doi.org/10.3390/su141610217
  11. Bird, R., & Davis-Nozemack, K. (2018). Tax avoidance as a sustainability problem. Journal of Business Ethics, 151(4), 1009–1025. https://doi.org/10.1007/s10551-016-3162-2
  12. Bornman, M., & Ramutumbu, P. (2019). A conceptual framework of tax knowledge. Meditari Accountancy Research, 27(6), 823–839. https://doi.org/10.1108/MEDAR-09-2018-0379
  13. Damayanti, T. W., T, S., Subekti, I., & Baridwan, Z. (2015). The role of taxpayer’s perception of the government and society to improve tax compliance. Accounting and Finance Research, 4(1). https://doi.org/10.5430/afr.v4n1p180
  14. Daniel, T., & Faustin, G. (2019). Effect of tax incentives on the growth of small and medium-sized enterprises (SMEs) in Rwanda: A case study of SMEs in Nyarugenge district. Journal of Accounting and Taxation, 11(5), 89–98. https://doi.org/10.5897/jat2019.0339
  15. Deyganto, K. O. (2022). The effect of tax incentives practices on the sustainability of micro, small, and medium enterprises in Ethiopia during the outbreak of the corona virus pandemic. Journal of Innovation and Entrepreneurship, 11(1). https://doi.org/10.1186/s13731-022-00194-8
  16. Fazriputri, N., Widiastuti, N., & Lastiningsih, N. (2021). Pengaruh sosialisasi dan pemahaman insentif pajak terhadap kepatuhan wajib pajak pada masa pandemi covid-19 (studi pada pemilik umkm di kota Bekasi). PROSIDING BIEMA Business Management, Economic, and Accounting National Seminar, 2(2).
  17. Fernandez-Bastidas, R. (2023). Entrepreneurship and tax evasion. Economic Modelling, 128, 106488. https://doi.org/10.1016/j.econmod.2023.106488
  18. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.2307/3151312
  19. Hasseldine, D. J., & Bebbington, K. J. (1991). Blending economic deterrence and fiscal psychology models in the design of responses to tax evasion: the New Zealand experience. Journal of Economic Psychology, 12(2). https://doi.org/10.1016/0167-4870(91)90018-O
  20. Hosono, K., Hotei, M., & Miyakawa, D. (2023). Causal effects of a tax incentive on SME capital investment. Small Business Economics. https://doi.org/10.1007/s11187-022-00709-3
  21. Houdek, P., & Koblovský, P. (2015). Where is my money? new findings in fiscal psychology. Society, 52, 155-158.
  22. Jansson, J., Nilsson, J., Modig, F., & Hed Vall, G. (2017). Commitment to sustainability in small and medium-sized enterprises: the influence of strategic orientations and management values. Business Strategy and the Environment, 26(1), 69–83. https://doi.org/10.1002/bse.1901
  23. Kirchler, E. (2007). The economic psychology of tax behavior. Cambridge University Press. https://doi.org/10.1017/CBO9780511628238
  24. Latief, S., Zakaria, J., & Mapparenta. (2020). Pengaruh kepercayaan kepada pemerintah, kebijakan insentif pajak dan manfaat pajak terhadap kepatuhan wajib pajak. Center of Economic Student Journal, 3(3), 270–289. https://doi.org/10.56750/csej.v5i2.387
  25. Li, Y., Al-Sulaiti, K., Dongling, W., Abbas, J., & Al-Sulaiti, I. (2022). Tax avoidance culture and employees’ behavior affect sustainable business performance: the moderating role of corporate social responsibility. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.964410
  26. Ma, J. (2017). Taxpayers ’ attitudes toward tax compliance in developed and developing countries : a critical review of the literature. Auckland University of Technology. doi: 10.4018/IJABE.2020040101
  27. Neumeyer, X. (2018). Sustainable business models, venture typologies, and entrepreneurial ecosystems: A social network perspective. Journal of Cleaner Production, 172, 4565–4579. https://doi.org/10.1016/j.jclepro.2017.08.216
  28. Night, S., & Bananuka, J. (2020). The mediating role of adoption of an electronic tax system in the relationship between attitude towards electronic tax system and tax compliance. Journal of Economics, Finance and Administrative Science, 25(49), 73–88. https://doi.org/10.1108/JEFAS-07-2018-0066
  29. Oladipo, O., Nwanji, T., Eluyela, D., Godo, B., & Adegboyegun, A. (2022). Impact of tax fairness and tax knowledge on tax compliance behavior of listed manufacturing companies in Nigeria. Problems and Perspectives in Management, 20(1), 41–48. https://doi.org/10.21511/ppm.20(1).2022.04
  30. Pratima Bansal and Mark DesJardine. (2014). Business sustainability: It is about time. 12(1), 1–23. https://doi.org/10.1177/1476127013520265
  31. Rahmayanti, N. P., Sutrisno T., S., & Prihatiningtias, Y. W. (2020). Effect of tax penalties, tax audit, and taxpayers' awareness on corporate taxpayers' compliance moderated by compliance intentions. International Journal of Research in Business and Social Science (2147- 4478), 9(2), 118–124. https://doi.org/10.20525/ijrbs.v9i2.633
  32. Raúl, S., Nancy, B., Tomás, B., & Miguel, P. (2022). Tax attitude and its relationship with profitability. Revista Venezolana de Gerencia, 27(8). https://doi.org/10.52080/rvgluz.27.8.28
  33. Rizqia, A. (2023). Pengaruh insentif pajak terhadap perkembangan umkm di Indonesia. Journal of Economics and Business UBS, 12(2). https://doi.org/10.52644/joeb.v12i2.204
  34. Schaltegger, S. (2011). Sustainability as a driver for corporate economic success. Society and Economy, 33(1), 15–28. https://doi.org/10.1556/SocEc.33.2011.1.4
  35. Stawicka, E. (2021). Sustainable development in the digital age of entrepreneurship. Sustainability (Switzerland), 13(8). https://doi.org/10.3390/su13084429
  36. Victor E., I., Francis Sylvanus, U., & Uzoma Samuel, E. (2020). Taxation and the growth of small and medium enterprises in Nigeria. Asian Journal of Social Sciences and Management Studies, 7(3), 229–235. https://doi.org/10.20448/journal.500.2020.73.229.235
  37. Weldeslassie, H. A., Vermaack, C., Kristos, K., Minwuyelet, L., Tsegay, M., Tekola, N. H., & Gidey, Y. (2019). Contributions of micro, small and medium enterprises (MSMEs) to income generation, employment and gdp: case study Ethiopia. Journal of Sustainable Development, 12(3). https://doi.org/10.5539/jsd.v12n3p46
  38. Yasa, I. N. P., Dharmawan, N. A. S., Adiputra, I. M. P., Martadinata, I. P. H., & Herawati, N. T. (2021). Tax Comprehension and Ethics Education Integration in Improving Tax Compliance Among Accounting Students: An Experimental Study. International Journal of Finance & Banking Studies (2147-4486), 10(1), Article 1. https://doi.org/10.20525/ijfbs.v10i1.1159
  39. Young, A., Lei, L., Wong, B., & Kwok, B. (2016). Individual tax compliance in China: a review. In International Journal of Law and Management (Vol. 58, Issue 5). https://doi.org/10.1108/IJLMA-12-2015-0063
  40. Yudatama, S. (March 8, 2023). Pelaku umkm di Bandung Raya masih banyak yang mencatat keuangan usahanya secara manual. Pikiran Rakyat. Retrieved from https://koran.pikiran-rakyat.com/ekonomi/pr-3036388591/pelaku-umkm-di-bandung-raya-masih-banyak-yang-m encatat-keuangan-usahanya-secara-manual?page=all