Home⇛Journal of Interdisciplinary Perspectives⇛vol. 4 no. 6 (2026)

Government Support Mechanisms, Taxpayers’ Compliance and Satisfaction Among Small and Medium Enterprises

Ace Gerome M. Niño

Discipline: Management Accounting

 

Abstract:

The research examined how Government Support Mechanisms (GSM), Taxpayers' Satisfaction (TPS), and Taxpayers' Compliance (TPC) interact among Small and Medium Enterprises (SMEs) in Iloilo City. The researcher collected data from 300 SME owners and managers using a structured research instrument with a descriptive-correlational research design. The business profile includes years of operations, industry type, and enterprise type. The study results showed that GSM received Highly Effective ratings from participants who reported Digital Infrastructure as the most important aspect. TPS received a rating of Highly Satisfied, with a mean value of 3.21, while TPC showed High results, with a mean value of 3.04. Data analysis using Multiple Regression and Mediation Analysis detected no direct links between the studied variables. The researcher observed a major negative suppression effect when testing TPS as a mediator. The GSM demonstrated a strong capacity to generate compliance through its direct relationships, which produced a positive effect with a beta value of 0.2531 and a p-value below 0.001. However, this relationship remained concealed because satisfaction levels changed. The results demonstrate Competitive Mediation, as satisfaction serves as an intervening variable that must be controlled to reveal how government support affects the system's core functions. The study shows that the Bureau of Internal Revenue (BIR) successfully operates its digital-first system, enabling it to meet compliance requirements. The system's actual compliance level depends on two factors: the "Power of Authority" and system usability, rather than on emotional satisfaction. The study recommends three actions: server optimization during high-demand times, implementation of standardized administrative processes, and development of simpler reporting methods for small businesses.



References:

  1. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179–211. https://doi.org/10.1016/0749-5978(91)90020-T
  2. Allingham, M., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3-4), 323–338. https://doi.org/10.1016/0047-2727(72)90010-2
  3. Al-Kamal, A.M., Samsuri, A., bin Bahaman, M.A., Arshad, I., Hadi, N.H., & Wijaya, M.W. (2025). Evaluating service quality, customer satisfaction, and perceived trust of Islamic digital banks: Indonesia and Malaysia. Jurnal Ekonomi Dan Bisnis Islam (Journal of Islamic Economics and Business), 11(2), 604–627. https://doi.org/10.20473/jebis.v11i2.80239
  4. Alghamdi, A., & Rahim, M. (2016). Development of a measurement scale for user satisfaction with e-tax systems in Australia. In: Hameurlain, A., et al. Transactions on Large-Scale Data-and Knowledge-Centered Systems XXVII. Lecture Notes in Computer Science, vol 9860. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-53416-8_5
  5. Alm, J. (2012). Measuring, explaining, and controlling tax evasion. International Tax and Public Finance, 19(1), 54–77. https://doi.org/10.1007/s10797-011-9171-2
  6. Alm, J., & Duncan, D. (2014). Estimating tax agency efficiency. Public Budgeting & Finance, 34(3), 92–110. https://doi.org/10.1111/pbaf.12043
  7. Alm, J., Cherry, T., Jones, M., & McKee, M. (2010). Taxpayer information assistance services and tax compliance behavior. Journal of Economic Psychology, 31(4), 577–586. https://doi.org/10.1016/j.joep.2010.03.018
  8. Alm, J., & Torgler, B. (2011). Do ethics matter? Tax compliance and morality. Journal of Business Ethics, 101(4), 635–651. https://doi.org/10.1007/s10551-011-0761-9
  9. Alshira’h, A.F., Al-Shatnawi, H.M., Alsqour, M.K., & Alshirah, M.H. (2020). The influence of tax complexity on sales tax compliance among Jordanian SMEs. International Journal of Academic Research in Accounting, Finance and Management Sciences, 10 (1): 250–260. http://dx.doi.org/10.6007/IJARAFMS/v10-i1/7172
  10. Antosz, K., Machado, J., Mazurkiewicz, D., Antonelli, D., & Soares, F. (2022). Systems engineering: Availability and reliability. Applied Sciences, 12(5), 2504. https://doi.org/10.3390/app12052504
  11. Assegaf, R., & Andesto, R. (2023). The effect of tax socialization, tax knowledge, and taxpayer awareness with tax sanctions as a moderation variable on individual taxpayer compliance (Empirical study on taxpayers registered at KPP Pratama Cibinong, West Java). Jurnal Multidisiplin Madani, 3(5), 1105–1124. https://doi.org/10.55927/mudima.v3i5.2909
  12. Batrancea, L., Nichita, A., Olsen, J., Kogler, C., Kirchler, E., Hoelzl, E., ... Zukauskas, S. (2019). Trust and power as determinants of tax compliance across 44 nations. Journal of Economic Psychology, 74. https://doi.org/10.1016/j.joep.2019.102191
  13. Bureau of Internal Revenue. (2024). Revenue Memorandum Order No. 37-2024: Guidelines for the identification and monitoring of small and medium taxpayers. Department of Finance. https://tinyurl.com/4rrpv28m
  14. Bureau of Internal Revenue. (2024). Revenue Regulations No. 8-2024: Implementing the classification of taxpayers under the Ease of Paying Taxes (EOPT) Act. Department of Finance. https://tinyurl.com/mv3wtdp8
  15. Bird, R. (2014). Foreign advice and tax policy in developing countries. In Bird, R. & Martinez-Vazquez, J. (ed.), Taxation and Development: The Weakest Link?, Chapter 4, pages 103-144, Edward Elgar Publishing. https://ideas.repec.org/h/elg/eechap/15750_4.html
  16. Braithwaite, V. (2003). Taxing democracy: Understanding tax avoidance and evasion. Ashgate Publishing. https://doi.org/10.4324/9781315241746
  17. Carey, M.P., & Forsyth, A.D. (2009). Teaching and measuring self-efficacy in professional settings. Journal of Behavioral Medicine, 32(1), 5–18. https://tinyurl.com/ycdk2shp
  18. Conger, A. (1974). A revised definition for suppressor variables: A guide to their identification and interpretation. Educational and Psychological Measurement, 34(1), 35–46. https://doi.org/10.1177/001316447403400105
  19. Davis, F. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319–340. https://doi.org/10.2307/249008
  20. Delone, W., & McLean, E. (2003). The DeLone and McLean model of information systems success: A ten-year update. Journal of Management Information Systems, 19(4), 9–30. https://doi.org/10.1080/07421222.2003.11045748
  21. Department of Trade and Industry (DTI) - Iloilo. (2023). MSME statistics and business name registration report.
  22. Devos, K. (2014). Factors influencing individual taxpayer compliance behavior. Springer Science & Business Media. https://link.springer.com/book/10.1007/978-94-007-7476-6
  23. Feld, L., & Frey, B. (2002). Trust breeds trust: How taxpayers are treated. Economics of Governance, 3(2), 87–99. https://doi.org/10.1007/s101010100032
  24. Feld, L., & Frey, B. (2007). Tax compliance as the result of a psychological tax contract: The role of incentives and responsive regulation. Law & Policy, 29(1), 102–120. https://doi.org/10.1111/j.1467-9930.2007.00248.x
  25. Figueroa, D. (2018). Cases of micro enterprises on the incentives and benefits of the Barangay Micro Business Enterprises Act of 2002. Review of Integrative Business and Economics Research, Available at SSRN. https://ssrn.com/abstract=4146970
  26. Good, C.V., & Scates, D.E. (1954). Methods of research: Educational, psychological, sociological. Appleton-Century-Crofts. https://doi.org/10.1037/13206-000
  27. Iloilo City Government. (2024). Master list of registered small and medium enterprises in Iloilo City. Local Economic Development and Investment Promotions (LEDIP) Office.
  28. Inasius, F. (2019). Factors influencing SME tax compliance: Evidence from Indonesia. International Journal of Public Administration, 42(11), 891–900. https://doi.org/10.1080/01900692.2018.1464578
  29. Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The slippery slope framework. Journal of Economic Psychology, 29(2), 210–225. https://doi.org/10.1016/j.joep.2007.05.004
  30. Levy, M. (1997). Consent, dissent, and patriotism. Cambridge University Press. https://tinyurl.com/5hxv7vyp
  31. Mauss, M. (1954). The gift: Forms and functions of exchange in archaic societies. Routledge. London: Cohen & West. https://nbnresolving.org/urn:nbn:de:0168-ssoar-89718-5
  32. Manghani, K. (2011). Quality assurance: Importance of systems and standard operating procedures. Perspectives in Clinical Research, 2(1), 34. https://doi.org/10.4103/2229-3485.76288
  33. Mas’ud, A., Manaf, N.A.A., & Saad, N. (2019). Trust and power as predictors to tax compliance: Global evidence. Economics & Sociology, 12(2), 192–204. https://doi.org/10.14254/2071-789x.2019/12-2/11
  34. Mulatsih, S.N., Saepuloh, D., Putri, W.A., & Alicia, R. (2024). Improving tax compliance intentions and self-assessment system: Approach to the theory of planned behavior. Review of Applied Socio-Economic Research, 28(2), 116–136. https://doi.org/10.54609/reaser.v28i2.524
  35. Murphy, K. (2004). The role of trust in nurturing compliance: A study of accused tax avoiders. Law and Human Behavior, 187–209 (2004). https://doi.org/10.1023/B:LAHU.0000022322.94776.ca
  36. National Economic and Development Authority (NEDA) Region VI. (2023). Western Visayas regional development report 2022.
  37. Oliver, R. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17(4), 460–469. https://doi.org/10.2307/3150499
  38. Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64(1), 12–40. https://tinyurl.com/2da3j6vs
  39. Paulhus, D., Robins, R., Trzesniewski, K., & Tracy, J. (2004). Two replicable suppressor effects in personality research. Multivariate Behavioral Research, 39(2), 303–328. https://doi.org/10.1207/s15327906mbr3902_7
  40. Raosoft, Inc. (2024). Sample size calculator. http://www.raosoft.com/samplesize.html
  41. Republic of the Philippines. (2024). Republic Act No. 11976: An act introducing administrative reforms and modernizing the Bureau of Internal Revenue to enhance taxpayer experience (Ease of Paying Taxes Act). Official Gazette. https://tinyurl.com/5y5xdu5jl
  42. SAP Concur Team. (2025). Tax accuracy and system-induced errors: A study on digital compliance risks. https://www.concur.be/products/concur-tax-assurance
  43. Sarjito, A. (2024). Data security and privacy in the digital era: Challenges for modern government. JIAN - Jurnal Ilmiah Administrasi Negara, 8(3):01–13. https://tinyurl.com/djzu28pb
  44. Schmidt, D., & Karsten, R. (2006). Taxpayer self-efficacy through technical education. Allied Academies International Conference. https://tinyurl.com/5d5r7872
  45. Setyawan, A.C. (2024). Enhancing public service delivery through digital transformation: A study on the role of e-government in modern public administration. Global International Journal of Innovative Research, 2(10), 2439–2453.
  46. Slemrod, J., & Yitzhaki, S. (2002). Tax avoidance, evasion, and administration. Handbook of Public Economics, 3, 1423–1470. https://doi.org/10.1016/S1573-4420(02)80026-X
  47. Torgler, B. (2007). Tax compliance and tax morale: A theoretical and empirical analysis. Edward Elgar Publishing. https://econpapers.repec.org/bookchap/elgeebook/4096.htm
  48. Tzelgov, J., & Henik, A. (1991). Suppression situations in psychological research: Definitions, implications, and applications. Psychological Bulletin, 109(3), 524–536. https://doi.org/10.1037/0033-2909.109.3.524
  49. Tyler, T.R. (1990). Why people obey the law. Yale University Press. https://psycnet.apa.org/record/1990-97539-000
  50. Venkatesh, V., & Davis, F. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186–204. https://doi.org/10.1287/mnsc.46.2.186.11926
  51. Venkatesh, V., Morris, M., Davis, G., & Davis, F. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425–478. https://doi.org/10.2307/30036540
  52. Veiga, L., Janowski, T., & Barbosa, L.S. (2016). Digital government and the reduction of compliance costs. Government Information Quarterly, 33(3), 455–468.
  53. Yilmaz, F., & Coolidge, J. (2013). Can e-filing reduce tax compliance costs in developing countries? World Bank Group. https://openknowledge.worldbank.org/handle/10986/16669

Tools


Copyright © 2026  KITE Digital Educational Solutions |  Exclusively distributed by CE-Logic