Determinants of Taxpayer Compliance: The Roles of Understanding, Socialization, System Implementation, and Sanctions

Abstract

This research was motivated by instances of fraudulent tax
reporting by corporate taxpayers in Gresik Regency. The study
aims to test and examine the influence of tax law knowledge, tax
socialization, modern administrative systems, and tax penalties
on taxpayer compliance. The population for the study consisted
of cooperative taxpayers registered with the Trade, Industry, and
Micro, Small, and Medium Enterprises Cooperative Office in
Gresik Regency, totaling 763 taxpayers. Using a probability
sampling method, a sample of 88 respondents was selected,
determined using the Slovin formula. The researchers employed
hypothesis testing using the Structural Equation Model (SEM)
method with SmartPLS software. The results indicate that
understanding tax regulations, tax socialization, and modern
administrative systems have a strong positive impact on taxpayer
compliance. However, tax penalties were found to have a
relatively negative influence on compliance.