The Effect of Tax Incentives on Microenterprise Performance with Tax Compliance as a Mediating Variable
DOI:
https://doi.org/10.58258/rb4j3d24Abstract
This study aims to analyze the effect of tax incentives on the performance of microenterprises, with tax compliance as a mediating variable. The study employs a quantitative approach with an explanatory design and uses secondary data from Statistics Indonesia covering six administrative areas of DKI Jakarta Province during the 2021–2024 period, resulting in 24 region-year observations. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that tax incentives do not have a significant direct effect on microenterprise performance but have a positive and significant effect on tax compliance. Tax compliance, in turn, has a positive and significant effect on microenterprise performance and significantly mediates the effect of tax incentives on microenterprise performance. These findings confirm that the effectiveness of tax incentives operates primarily through improved tax compliance rather than through a direct effect on performance. This study contributes theoretically by strengthening the role of tax compliance as a mechanism linking fiscal policy and microenterprise performance. Practically, the findings imply that tax incentive policies should be accompanied by easier access, simplified administrative procedures, tax education, and strengthened digital services to improve compliance and support microenterprise performance more effectively.References
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