The Impact of Tax Regulation on Taxpayer Compliance in the Micro, Small, and Medium Enterprises Sector: A Legal Literature Review

Pratika Novia Rimadhani; Rahayu Mardikaningsih; Fayola Issalillah; Sulani Sulani; Elly Christanty Gautama

Authors

Pratika Novia Rimadhani Universitas Sunan Giri Surabaya
Rahayu Mardikaningsih Universitas Sunan Giri Surabaya
Fayola Issalillah Universitas Sunan Giri Surabaya
Sulani Sulani Universitas Sunan Giri Surabaya
Elly Christanty Gautama Universitas Sunan Giri Surabaya

Keywords:

tax regulation, MSMEs, tax compliance, Government Regulation No. 23 of 2018, tax technology, tax incentives, tax socialization

Abstract

This research aims to identify the influence of tax regulation on taxpayer compliance within the Micro, Small, and Medium Enterprises (MSME) sector in Indonesia. Tax regulation plays a crucial role in supporting the economic sustainability of MSMEs, yet it often encounters challenges such as the low level of understanding and awareness among taxpayers. This study adopts a normative juridical approach by analyzing relevant literature and regulations, including Government Regulation No. 23 of 2018, to assess the effects of tax regulation on the compliance behavior of MSME taxpayers. The findings indicate that although tax regulations—such as preferential rates for MSMEs—have facilitated compliance, many taxpayers in this sector still exhibit limited understanding of their tax obligations. The primary obstacles to improving compliance include insufficient dissemination of tax information, the complexity of reporting systems, and inadequate incentives. In addition, the adoption of technology-based approaches is found to hold significant potential for enhancing efficiency and transparency in MSME tax administration.The study recommends strengthening the dissemination of tax regulations, promoting the use of technology in tax reporting, and implementing more inclusive incentive policies to improve tax compliance in the MSME sector. Through these measures, it is anticipated that MSME taxpayer compliance will increase significantly, thereby supporting fiscal stability and fostering sustainable economic growth.

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