ABSTRACT

According to the Organization for Economic Co-operation and Development (OECD), the Indonesia Tax ratio in 2017 was the lowest compared to other countries in Asia-Pacific. Meanwhile, the tax ratio in 2018 was 11.6% lower than the middle-income country for 17.7%. This indicates that the level of tax compliance in Indonesia is still low and needs improvement. One of the tax compliance sectors is MSME taxpayers that hold a portion up to 65 % from business actors, but from the number of active taxpayers, it only reached 1.8 million MSMEs. This research aims to analyze the improvement strategy of tax compliance from the taxpayer as MSMEs actors in Semarang, Indonesia. The results showed the awareness of paying tax, the knowledge, and understanding of tax regulation and the effectiveness of the taxation system have a significant positive influence on tax compliance.

Keywords: tax ratio, tax compliance, taxpayer