The Influence of Tax Understanding, Tax Rate, Tax Incentive, and Tax Sanction on Taxpayer Compliance during the Covid-19 Pandemic

(Case Study on UMKM in Surakarta Regency)

Redy Setyawan 1) , Muhammad Abdul Aris2)

1) Faculty of Economics and Business, University of Muhammadiyah Surakarta, Indonesia

2) Faculty of Economics and Business, University of Muhammadiyah Surakarta, Indonesia

Email: redysetyawan12345@gmail.com

Abstract: This study aims to examine the effect of understanding taxes, tax rates, tax incentive policies, and tax sanctions on taxpayer compliance during the covid-19 pandemic. The population in this study were all Micro, Small and Medium Enterprises (UMKM) in the Surakarta City area. The data used in this study is primary data obtained from the results of a questionnaire circulated in a case study on UMKM in the city of Surakarta. Sampling in this sample by simple random sampling in order to obtain 100 samples. The data analysis technique used was multiple linear regression analysis with SPSS version 25. The results showed that understanding of taxes, tax incentives, and tax sanctions had a significant effect on taxpayer compliance, while tax rates had no significant effect on taxpayer compliance.

Keywords: Understanding Tax, Tax Rate, Tax Incentive, Tax Sanction, Taxpayer Compliance

I. INTRODUCTION

It can be said to be a country if an area has elements of territory, people, and government in it. Indonesia is one of the developing countries whose economic development can be said to be quite rapid. In the implementation of its government, Indonesia continues to carry out sustainable national development which aims at the welfare of the people. The cost of state development must be considered in order to achieve the goal. Regarding state revenue, the tax sector is the sector that has the most potential to contribute to the State Budget (APBN) compared to other sectors

The government collects taxes as an effort to support national development funding. It is known that taxes are the largest source of income (75%) for the state to fund the APBN (Rahayu, 2017). With the aim of financing the State Revenue and Expenditure Budget (APBN), its revenues have increased quite substantially from value to percentage of overall income each year. This shows that the role of taxes at this time is very dominant in state revenue. In addition, the ability of taxes to stimulate the economy is also desirable

Table1Contribution of Taxes toAPBN to 2014-2019

Source: kemenkeu.go.id(Ministry of Finance of the Republic of Indonesia, 2020)