Evaluation of Government Reform in Tax Administration: Evidence from Micro, Small and Medium Enterprises (MSMEs) in Indonesia

This study analyzes the effectiveness of the government reform in MSMEs tax administration by examining the perceptions of the players on the issuance of tax regulation based on the four canons of taxation related to equity, certainty, convenience, and economy. Data are collected from 518 MSME respondents using surveys. Based on the results, it is concluded that the majority of respondents perceived that the new regulation regarding income tax for MSMEs fulfilled the four canons of taxation. This study provides its originality by analyzing the effectiveness of the current tax reform on MSMEs, especially in the context of a developing country, i.e., Indonesia where its tax ratio to GDP was much lower than other developing economies.