ABSTRACT MSMEs contribute significantly to Gross Domestic Product (GDP), reaching 61% and employing approximately 97% of Indonesia's workforce. The low contribution of the MSME sector to national tax revenue presents a challenge for the tax authorities. This study aims to analyze the effect of modernization of the tax administration system and tax knowledge on taxpayer compliance, moderated by tax authorities' services. The population used was all Micro, Small, and Medium Enterprises (MSMEs) in the Jakarta Special Capital Region (DKI Jakarta). The sampling technique used in this study was a non-probability sampling method with a purposive sampling approach, with a sample size of 125 respondents. The data analysis methods used in this study are descriptive and quantitative data analysis, which will test hypotheses using statistical techniques and examine the relationships between the variables studied. Data were processed using SPSS 24. The results show that modernization of the tax administration system has a positive effect on taxpayer compliance. Tax knowledge has a positive effect on taxpayer compliance. Tax authorities' services strengthen the influence of modernization of the tax administration system on taxpayer compliance. Tax authorities' services strengthen the influence of tax knowledge on taxpayer compliance. This research contributes to the development of a theory of taxpayer behavior, provides input for the Directorate General of Taxes in formulating more effective policies, and provides insights for MSMEs regarding the importance of understanding taxation and the role of tax authorities in supporting their tax obligations.
Simorangkir et al. (Thu,) studied this question.