Factors Affecting Tax Compliance as Moderated by Tax Awareness Among Small and Medium Enterprises Owners/Managers in Calamba City, Laguna

The study explored the determinants of tax compliance among owners/managers of small and medium enterprises (SMEs) inCalamba City, Laguna. Primarily, this assessed the levels of tax compliance, tax knowledge, tax sanctions, income levels, and tax awareness. The most significant factor affecting tax compliance was identified and likewise investigated whether tax awareness acts as a moderator for the effects of tax knowledge, tax sanctions, and income levels on compliance. The study proposed an extension program that can effectively enhance tax compliance among SMEs in the specified locality, based on the findings. A descriptive research design was employed, and quantitative data was used. The study surveyed 309 SME business owners andmanagers in Calamba City through stratified random sampling and a Rao soft calculator from a total population of 1,568 SMEs. The researcher used SPSS for statistical analysis, including frequency and percentage, mean, and multiple linear regression. The findings of the study indicate a general agreement on tax compliance among SME owners and managers, emphasizing theimportance of business registration. Respondents demonstrate a good grasp of primary and secondary documents for sales transactions but show a potential gap in understanding the complexity of tax regulations. Concerns about tax sanctions are high, particularly regarding the closure of unregistered businesses. Perceptions of income stability vary, reflecting challenges during the pandemic. Tax awareness is generally high, especially regarding the need to register with the BIR and comply with tax laws. Moreover, there is a significant positive effect of tax knowledge on tax compliance; however, tax sanctions, income levels, and tax awareness do not significantly impact compliance. The moderating effect of tax awareness indicates its significant influence on the correlation between tax knowledge, income levels, and tax compliance among SME owners and managers. From the findings, an extension program was proposed to enhance taxpayer knowledge and awareness through collaboration between the BIR, barangays, and private companies. The program includes seminars, open forums, one-onone assistance, verbal memos for first-time violators, and an awareness campaign through social media and educational institutions