| Abstract: | This study investigates the factors affecting tax compliance behavior among taxpayers. The research used a primary data collection approach with close-ended questionnaires and an explanatory research design, along with a quantitative research method. The data was analyzed using inferential statistics. The findings suggest a multifaceted approach is necessary to improve tax compliance. Tax knowledge emerged as the strongest factor, highlighting the need for investment in tax literacy initiatives. Educational workshops, online resources, and collaborations with educational institutions can equip taxpayers with the knowledge to understand their filing obligations and claim allowable deductions and credits. This can foster a culture of tax awareness from a young age. Perceived fairness and trust in the tax authority were also positively correlated with compliance. When taxpayers believe the tax system is fair and the tax authority is competent and operates with integrity, they are more likely to fulfill their obligations. Transparency in tax administration practices, including clear communication of tax codes and public disclosure of tax revenue allocation, is essential for building trust. The presence of fines and penalties was found to have a deterrent effect on non-compliance. However, it's important to balance deterrence with promoting trust and fairness. Overreliance on punitive measures can backfire, breeding resentment and distrust. The tax system should be designed in a way that compliance is the natural course of action, rather than something to be avoided out of fear of punishment. By investing in tax literacy, ensuring fairness and transparency, and implementing a balanced approach to enforcement, governments can empower taxpayers, reduce errors due to confusion, and ultimately, enhance tax compliance. The findings of this study provide valuable insights for policymakers and tax authorities to develop targeted strategies for improving tax compliance. |
