Research on tax compliance behavior in the digital economy - empirical evidence from small and medium enterprises in Ho Chi Minh City in the period of 2018-2023

Abstract

The digital transformation of recent years has created many opportunities. Still, it has also presented governments Viet Nam with new challenges in developing and implementing policies as a result of falling behind on emerging trends in technology and the services offered by the digital economy. Traditional domestic enterprises and international businesses are now engaged in intense rivalry in our country due to economic activity on digital platforms. So on, tax authorities must also work toward digitalizing the tax collection process to guarantee tax collection from digital transactions and to monitor and check taxpayers' tax compliance procedures efficiently. Through the Internet, taxpayers may now access additional revenue sources thanks to the Internet. Tax requirements are nevertheless incurred by persons taking part in these transactions, even when they occur online, and include the payment of cryptocurrency. In the digital economy, general awareness about taxes, tax regulations, and tax administration procedures might make it more difficult for taxpayers to comply with their obligations. Beginning with such circumstances, the authors investigated the subject for this study includes 6 factors affecting tax compliance behavior: Understanding of Taxes; Perception of fairness; Corporate Reputation; Characteristics of business operations; Socio-economic; Tax laws and other legal considerations, with research methods combining qualitative and quantitative research. After conducting qualitative research with in-depth interviews with experts, the authors obtained 362 valid survey samples obtained through quantitative research by conducting questionnaire surveys directly with subjects. The subjects are managers, chief accountants, and tax accountants working at SMEs in HCM City, attending the Postgraduate Training Course of UEH University. The authors used SMARTPLS4 software to evaluate the research model by assessing the quality of the reflective and the formative model; evaluating the reliability and convergent validity; assessing discriminant validity; and evaluating item collinearity. In the next step, the authors conducted measurement of the structural model by testing the multicollinearity of independent variables; testing the meaning of impact relationships (Path Coefficients); and evaluating the coefficient of determination R square, F square. Based on the data, the authors conclude that the Corporate Reputation component has the most effect, and Tax laws and other legal considerations factors have the least influence on SMEs' tax compliance. The remaining elements of the suggested study model also affect how SMEs in HCM City behave when it comes to tax compliance. The authors then suggest several measures to enhance SMEs' tax compliance in HCM City. The study's findings provide SMEs in HCM City and our state with a useful foundation on which to build more specialized solutions, ideal tax laws and policies, and maximally advantageous circumstances for taxpayers to comply with tax laws.