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The Role of Taxation Education on Taxation Knowledge and Its Effect on Tax Fairness as well as Tax Compliance on Handicraft SMEs Sectors in Indonesia

Author

Listed:
  • Imam Mukhlis
  • Sugeng Hadi Utomo
  • Yuli Soesetio

Abstract

This study aims to analyze the role of taxation education on the tax knowledge and its impact on tax fairness and tax compliance of handicraft SME sector in Indonesia. The unit of analysis is handicraft SMEs businessman located in the district / city in the province of East Java, Indonesia. The type of data is primary data obtained through a questionnaire technique. Samples were obtained from a population sample that is taken with a multistage method with simple random sampling technique. While the data analysis method used is the analysis of Structural Equation Modeling by using Partial Least Square. The study provides conclusions, namely; tax education has a positive and significant impact on tax knowledge, tax knowledge has a significant and positive effect on tax fairness, tax fairness has a significant positive effect on tax compliance and tax knowledge has a significant and positive effect on tax compliance. Based on these results, the strengthening of the tax education is very important in shaping the tax knowledge, so that it can increase tax compliance. In this case the tax socialization efforts can be done through the dissemination of information about the types of taxes, tax rates, and tax payment mechanisms.

Suggested Citation

  • Imam Mukhlis & Sugeng Hadi Utomo & Yuli Soesetio, 2015. "The Role of Taxation Education on Taxation Knowledge and Its Effect on Tax Fairness as well as Tax Compliance on Handicraft SMEs Sectors in Indonesia," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(4), pages 161-169, October.
    • Handle: RePEc:jfr:ijfr11:v:6:y:2015:i:4:p:161-169
    DOI: 10.5430/ijfr.v6n4p161
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