OPTIMIZING TAXPAYER COMPLIANCE IN FREELANCE SECTOR: A STUDY OF AWARENESS, REGULATIONS UNDERSTANDING, AND SYSTEM EFFECTIVENESS

Abstract

The study focuses on the impact of taxpayer awareness, understanding of tax regulations, and the effectiveness of the tax system on the compliance of individual taxpayers engaged in freelance work. One factor that hinders and reduces the compliance of individual taxpayers who do free work to fulfil their tax obligations is the attitude of taxpayers who consider paying taxes unimportant. The research method was quantitative, where data collection uses the distribution of questionnaires to respondents. This study was conducted based on the findings of the distribution of questionnaires to 100 respondents. Descriptive statistical calculations reveal the distribution of scores and characteristics of the independent variables: taxpayer awareness, understanding of tax regulations, and effectiveness of the tax system. Through regression analysis, it was determined that all three independent variables have a significant favourable influence on taxpayer compliance. The findings indicate that informed taxpayers are more likely to comply with their tax obligations. Additionally, understanding tax regulations and perceiving the tax system as effective enhance compliance. The research further discusses the implications of these findings for tax policy and administration. It suggests that promoting awareness, knowledge, and perceived effectiveness of the tax system can enhance compliance among freelance taxpayers.