Taxpayer compliance among MSMEs in Indonesia: Moderating role of e-filing on tax authority services, awareness, and tax sanctions

Type of the article: Research Article AbstractThis study investigates the impact of tax authority services, awareness, and tax sanctions on MSMEs’ tax compliance, with e-filing as a moderating variable. The study is inspired by the low level of tax compliance among MSMEs in emerging economies. A quantitative analysis was conducted using the PLS-SEM approach. Data were collected between January and March 2025 through a questionnaire administered to 100 MSME taxpayers, who were either firm owners or financial managers registered with local tax offices in Indonesia. The results indicate that taxpayer awareness has a positive effect on taxpayer compliance (β = 0.169; p < 0.05), while tax authority services show a negative effect (β = –0.189; p < 0.05). Tax sanctions had no effect on compliance (β = –0.081; p > 0.05). Furthermore, e-filing moderates the relationship between taxpayer awareness and compliance (β = 0.214; p < 0.05), but it does not moderate the effects of tax authority services and tax sanctions. The model explains 13.3% of the variance in taxpayer compliance (R² = 0.133), indicating that additional factors may influence compliance behavior. These findings highlight the importance of integrating taxpayer education with digital tax systems to enhance voluntary compliance. The study suggests that improving awareness, supported by accessible technology, is more effective than relying solely on service quality or sanctions in regional MSME contexts. AcknowledgmentWe would like to thank Universitas Jambi for the funding support of research schemes with Rector Decree of Universitas Jambi Number 1654/UN21/PT/2024 dated June 12, 2024, and Agreement/Contract Letter Number 74/UN21.11/PT.01.05/SPK/2024, dated June 14, 2024.