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The Determinants of Tax Incentive Effectiveness During Covid-19 Pandemic

Author

Listed:
  • Patricia Diana , Chermian Eforis

    (Universitas Multimedia Nusantara, 15810, Tangerang, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective - The paper aims to measure tax incentive effectiveness specifically for SMEs using internal government factors such as modernization and socialization of the tax system and internal personal taxpayers' factors using tax knowledge. Methodology/Technique - Using primary data collected by questionnaire. Respondent criteria prepare according to SMEs classification from the Regulation of the Minister of Finance of the Republic of Indonesia. Data in this study were analyzed using multiple linear regression with SPSS statistics. Findings - this research found that modernization, socialization, and taxpayer knowledge will improve tax incentive efficiency. Internal government factors consist of modernization of the tax system and frequent socialization, significantly encouraging taxpayers to utilize the incentive without having deep knowledge of taxation. Novelty - This study explains the determinants of tax incentives from both sides, government, and taxpayer, especially for SMEs during pandemic COVID 19 in the Indonesian market. Type of Paper - Empirical."

Suggested Citation

  • Patricia Diana , Chermian Eforis, 2022. "The Determinants of Tax Incentive Effectiveness During Covid-19 Pandemic," GATR Journals afr214, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr214
    DOI: https://doi.org/10.35609/afr.2022.7.2(1)
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    References listed on IDEAS

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    1. Zee, Howell H. & Stotsky, Janet G. & Ley, Eduardo, 2002. "Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries," World Development, Elsevier, vol. 30(9), pages 1497-1516, September.
    2. Stefan Van Parys, 2012. "The effectiveness of tax incentives in attracting investment: evidence from developing countries," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(3), pages 129-141.
    3. Paul Gaggl & Greg C. Wright, 2017. "A Short-Run View of What Computers Do: Evidence from a UK Tax Incentive," American Economic Journal: Applied Economics, American Economic Association, vol. 9(3), pages 262-294, July.
    4. Tian, Binbin & Yu, Baixue & Chen, Shi & Ye, Jingjing, 2020. "Tax incentive, R&D investment and firm innovation: Evidence from China," Journal of Asian Economics, Elsevier, vol. 71(C).
    5. Edwards, Alexander & Todtenhaupt, Maximilian, 2020. "Capital gains taxation and funding for start-ups," Journal of Financial Economics, Elsevier, vol. 138(2), pages 549-571.
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    Cited by:

    1. Sadangsal, Charisse C & Orduela, Lyka Joy D & Ramos, Irish Kaye L & Tumiguing, Xyra P & Wakit, Chrizza Mae C & Tiongson, Dorilyn C, 2024. "Perceived Impact of Corporate Recovery and Tax Incentives for Enterprises Act (Create Law) on Microenterprise Pharmacies in Nueva Vizcaya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 2121-2139, July.

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    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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