Analysis on the Role of Tax Planning on Tax Compliance with Tax Digitalization as a Mediating Variable

Abstract

Tax planning and digitalization have received particular attention in the context of taxation, especially for taxpayers, due to their essential role in enhancing tax compliance. This study aims to identify the role of tax planning on tax compliance with tax digitalization as a mediating variable in the MSME sector. This study used a survey method with 180 respondents. We analyzed the data using Smart-PLS (Partial Least Square) for Structural Equation Modelling (SEM). The results show that tax planning and tax digitalization positively affect tax compliance. Furthermore, tax digitalization is a mediator between them. This research provides further suggestions on how tax planning can improve tax digitalization in their tax compliance.