Title: Trust in authorities and tax compliance to improve agility of Indonesian micro, small, and medium enterprises

Authors: Yenni Mangoting; Vincent Nathaniel; Razana Juhaida Johari

Addresses: Accounting Department, School of Business and Management, Petra Christian University, 60236, Indonesia ' Accounting Department, School of Business and Management, Petra Christian University, 60236, Indonesia ' Faculty of Accountancy, Universiti Teknologi MARA, 42300, Malaysia

Abstract: This study aims to determine whether tax awareness and knowledge can enhance the micro, small, and medium enterprises (MSMEs) taxpayers' compliance in Indonesia; trust in authorities was also investigated as a moderating factor. Research respondents are individuals who own MSMEs. This research succeeded in collecting data from 136 MSMEs. However, only 102 data met the criteria for analysis. The study used the partial least squares structural equation modelling (PLS-SEM) approach to analyse data. This study demonstrates that tax knowledge and awareness have a significant impact on tax compliance. The moderation test shows that taxpayer's trust strengthens the influence of knowledge and awareness on taxpayer compliance. This research helps the government in formulating policies to improve trust-based tax compliance. So, it does not rely on sanctions and tax audits. Trust is also important because it influences knowledge and awareness, which can change MSMEs' tax compliance behaviour.

Keywords: MSMEs; micro; small; and medium enterprises; tax compliance; tax awareness; tax knowledge; trust in authorities.

DOI: 10.1504/IJASM.2025.147875

International Journal of Agile Systems and Management, 2025 Vol.18 No.3/4, pp.429 - 446

Received: 26 Mar 2024
Accepted: 13 Jul 2024
Published online: 05 Aug 2025 *

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