Group 12 Digital Factors Influencing the Level of Tax Compliance Among Micro Enterprises

HOLY ANGEL UNIVERSITY
Digital Factors Influencing the Level of Tax Compliance Among
Micro Enterprises in Angeles City
A Research Paper
Presented to the Faculty
of the School of Business and Accountancy
Holy Angel University
Angeles City
In Partial Fulfilment
of the Requirement for the Degree of
Bachelor of Science in Management Accounting

LIST OF TABLES AND FIGURES

Tables
Digital Factors, Tax Compliance, Micro Enterprises
The rapid advancement of digital technologies has had a profound impact on how businesses operate and manage their day-to-day functions. Micro
enterprises are small-scale businesses that form the backbone of many local economies around the world. These businesses are typically operated by a sole
proprietor or a small team, and they often serve their local communities by providing goods and services tailored to local needs. Micro enterprises are known for
their agility and ability to quickly adapt to market changes, making them an essential part of any dynamic economy. Despite their small size, micro enterprises
contribute significantly to job creation and innovation. They offer opportunities for entrepreneurship and often serve as a stepping stone for individuals looking to
enter the business world. Additionally, micro enterprises play a crucial role in fostering economic inclusion by providing opportunities for marginalized groups,
such as women and youth, to start their own businesses. Micro enterprises form a critical part of the economic landscape in Angeles City, contributing significantly
to local employment and economic development. These small businesses often face unique challenges in managing their tax compliance obligations, particularly in
the context of rapidly evolving digital technologies.
The landscape of taxation has undergone significant transformations, largely propelled by advancements in technology and the impact of these
technical developments, governments around the world have embraced digital platforms as a means of optimizing tax processes. Particularly the notable
development of Electronic Filing or also known as e-filing systems, as stated by Azmi and Kamarulzaman (2010), a prominent type of e-government is the
introduction of the e-filing system for income tax, through this system, taxpayers are able to submit their tax returns electronically and as mentioned by Ragupathi
and Pramu (2020), two advantages of filing taxes electronically over mailing in your return are that you will receive your tax refund sooner, and your tax data will
go directly to IRS computers with a significantly lower chance of human keying or document scanning errors, e-filed returns cost 20 times less to process than
paper returns, saving taxpayers a lot of money. Additionally, this eliminates the need for traditional paper-based filing methods. Traditional manual methods of tax
filing can be time-consuming, resource-intensive, and prone to errors, presenting a dilemma for micro enterprises that must balance compliance requirements with
limited resources and expertise. According to Mbise and Baseka (2023), taxes are essential tools and key sources for the government, and that all governments
throughout the world require revenues to improve various areas of their countries because every nation's development is heavily reliant on taxing.
However, the shift from manual to digital methods of tax filing presents several challenges. Micro enterprises may lack the necessary computer literacy
and familiarity with e-filing systems, leading to potential difficulties in adoption. Moreover, security risks associated with digital tax filing, such as data breaches or
identity theft, can deter businesses from fully embracing e-filing systems. As to that, Cybersecurity risks increase as tax compliance becomes more digitized. Micro
enterprises may be more susceptible to hacking, data breaches, and other cyberattacks if they don't have strong cybersecurity safeguards in place. The level of
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information transparency is increasing, providing real-time and transparent financial data through digital technologies helps improve tax compliance however, this
leads to a concern about data privacy and security, which must be addressed in tax regulation (Sadiq, 2021).
However, as stated by Hidayat and Siska (2024), even though digitization presents issues such as the need for distinct tax rules and the need to
overcome technological barriers, it also provides opportunities to improve tax offers, increase taxpayer connectivity, and improve compliance.
Despite these challenges, the adoption of e-filing systems and other digital technologies holds the potential to significantly enhance tax compliance
among micro enterprises in Angeles City. By leveraging these systems, micro enterprises can improve their accuracy and timeliness in meeting tax obligations,
leading to better adherence to tax regulations and policies. As to that, the digitalization of tax compliance presents both challenges and opportunities for Micro
Enterprises in today's contemporary business landscape. As technological advancements continue to reshape industries, micro enterprises find themselves at the
forefront of these changes, navigating the complexities of tax legislation amidst the evolving digital era.
In essence, the digitalization of tax compliance represents a pivotal shift in the way micro enterprises interact with tax authorities and fulfill their tax
obligations. Moving forward, it is imperative for policymakers, tax authorities, and micro enterprises alike to collaborate in addressing the challenges posed by
digitalization while seizing the opportunities it presents. By embracing technological advancements responsibly and proactively, micro enterprises can contribute to
a more efficient, transparent, and compliant tax ecosystem, driving growth and prosperity in the digital age.
To conclude, this research focuses on exploring the digital factors influencing the level of tax compliance among micro enterprises in Angeles City. By
examining the extent to which these businesses utilize e-filing systems, the role of computer literacy, and the impact of perceived vulnerabilities related to e-filing,
the study aims to provide a comprehensive understanding of how technology adoption shapes tax compliance behavior. It also assesses the influence of e-filing and
other technological advancements on taxpayers' adherence to regulations and requirements.
In the dynamic business environment of Angeles City, micro enterprises are encountering significant shifts influenced by technological advancements,
particularly in the realm of tax compliance. As pivotal contributors to economic growth and innovation, micro enterprises have opportunities to adapt to digital
transformations, including the adoption of Electronic Filing (e-filing) systems. According to Mbise and Baseka (2023), digital tax administration systems such as e-
filing have been adopted by many countries to enhance taxpayer experience in the digital economy. The introduction of these systems ensures that taxpayers
comply with tax laws and policies available in a particular country. Studies have been undertaken to investigate the effects and impacts of these implementations.
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E-filing systems, a notable development in tax administration, offer micro enterprises in Angeles City the opportunity to submit their tax returns electronically,
streamlining processes and reducing paperwork.
The findings from Nairobi, Tanzania and Kenya reveal the association between technology and tax compliance among small and medium enterprises
(SMEs) which could be attributed to the study which will be conducted among the micro enterprises in Angeles City. A study by Katua (2019) in Nairobi discusses
the impact of digitalization on tax administration, technology, and tax compliance by SMEs. It was found that technology plays a vital role in mediating the
relationship between digitalization and tax compliance since it is a crucial component of digitalization. In relation to that, another study in Tanzania found that
factors such as technology literacy and system quality have significant impact on tax compliance among SMEs while results pertaining to security concerns are
non-significant (Mashauri, 2021). Contrary to the previously mentioned study, Kenya studies found that security had a positive influence on tax compliance with
computer literacy also having a significant impact on tax compliance (Wambongo, 2019). Collectively, the studies show varying results and discuss a certain
extent of understanding of the influence of digital factors and e-filing to tax compliance. The studies provide factors that can be used to adopt factors on analyzing
the influence of technology and e-filing among micro enterprises in Angeles City.
Angeles City micro enterprises, with their constrained resources and operational capacities, encounter specific hurdles in complying with tax legislation
amidst digitalization. The shift towards digital platforms increases susceptibility to cyber threats, necessitating robust cybersecurity measures to safeguard sensitive
financial data. Furthermore, the transparency afforded by digital technologies raises concerns about data privacy and security, underscoring the importance of
comprehensive tax regulation frameworks tailored to the local context. One study conducted in Jamaica shows the acceptance of e-filing among micro enterprises.
The attitude of the users towards the system is positive which could be attributed to benefits perceived on its usage. Although a majority of the respondents do not
use e-filing, it shows that a majority of those who use the system experience challenges but have lower tax compliance costs.
In the Philippines, a local study by Castro, et al. (2015) assessing the level of awareness of Batangas City small and medium enterprise (SMEs) owners
concerning the Bureau of Internal Revenue (BIR) e-filing and tax payment. The results show that the owners are aware of the system and the difficulties identified
in the study were often experienced. These difficulties include factors such as security, costs and such. According to the study, the inadequate state of the
Philippines’ cyber infrastructure is evident as a significant vulnerability in the e-tax system. If not addressed promptly, this issue could significantly reduce
compliance rates as taxpayers become dissatisfied with the system, urging for non-compliant behavior.
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The aforementioned factors can be used to further study the influence of e-filing on the premise of micro enterprises in Angeles City. Nevertheless, the
digitalization of tax compliance presents Angeles City micro enterprises with opportunities to enhance efficiency, connectivity with tax authorities, and overall
compliance. Real-time access to financial data enables informed decision-making and improved tax planning strategies.
A comprehensive examination of these factors and their influence on compliance behavior in Angeles City was lacking. Specifically, this research
examined the effectiveness of e-filing systems, the role of computer literacy, assessment of security's risks, and how perceived vulnerabilities influenced micro-
enterprises’ willingness to adopt e-filing technologies. Ultimately, it aimed to gauge the overall influence of digital factors on the level of tax compliance among
micro-enterprises in Angeles City.
RESEARCH OBJECTIVES
 To describe the tax filing method used by microenterprises in Angeles City.
 To examine how the utilization of e-filing systems and technology influences tax compliance among micro enterprises in Angeles City, focusing on
the effectiveness of e-filing systems, the role of computer literacy, and the assessment of security risks related to e-filing.
 To evaluate the influence of e-filing utilization and technological advancements on the overall tax compliance of micro enterprises in Angeles City,
particularly its influence on the taxpayers' adherence to tax regulations and requirements.
MANAGEMENT DILEMMA
Micro enterprises often face a tough choice when it comes to handling their taxes. The challenge is finding the right balance between meeting
compliance requirements, dealing with limited resources, and coping with the difficulties of using old-fashioned, manual methods. Furthermore, the problem also
lies in the transition from manual tax filing methods to digitalized E-Filing systems—a need for Micro Enterprises to be used to the evolving tax frameworks that
require digital tools and software, a shift to technological expertise. While there are evident benefits associated with digitalization, there also exist significant
security risks that pose a threat to sensitive taxpayer information. Thus, there is a pressing need to assess the digital factors influencing the level of tax
compliance among micro enterprises in Angeles City. It is a critical dilemma that requires careful consideration in the ever-evolving landscape of technology and
business.
RESEARCH QUESTIONS
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The research aims to assess the digital factors influencing the level of tax compliance among micro enterprises in Angeles City. This research seeks to
address these questions:
1. How do Microenterprises in Angeles City describe their tax filing method?
2. How does technology influence tax compliance, specifically in terms of:
2.1 E-Filing
2.2 Computer Literacy and Advantages
2.3 Security Risks
3. How does e-filing and technology influence the overall tax compliance of microenterprises’ taxpayers in Angeles City?
SCOPE AND LIMITATIONS
This study aims to examine the digital factors that influence the level of tax compliance behavior among micro enterprises. It will specifically examine
the influence and effectiveness of e-filing systems, the role of computer literacy, and security risks to micro enterprises. Moreover, it will assess their overall
influence on tax compliance.
The researchers will focus specifically on micro enterprises operating within Angeles City who are manually and/or using digitized software to comply
and submit their tax requirements. Data collection will primarily involve structured survey questionnaires with key stakeholders within the registered micro
enterprises as taxpayers in Angeles City
SIGNIFICANCE OF THE STUDY
This research carries significant implications for various stakeholders involved in tax compliance and technology adoption within micro enterprises.
Moreover, the findings of this study have the potential to inform policy, empower micro enterprises, support technology providers, and contribute to academic
scholarship, ultimately fostering a more efficient and effective tax compliance landscape for micro enterprises in Angeles City and beyond. Hence, the
beneficiaries of this study will be as follows:
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 Government Agencies. Understanding the factors influencing micro enterprises adoption of e-filing systems can assist government agencies, including tax
authorities, in crafting more targeted policies and programs to encourage digital tax compliance. By identifying barriers and incentives, authorities can
customize support measures to facilitate smoother adoption processes and improve overall tax compliance rates.
 Users and Employees. Employees involved in tax-related tasks and users of Electronic Filing and Payment System (EFPS) can benefit from the insights
derived from this study. By thoroughly examining the influence and effectiveness of e-filing systems, as well as considering computer literacy and security
risks, these individuals can make informed decisions regarding technology adoption. This knowledge can empower them to streamline tax compliance
processes, potentially reducing costs and administrative burdens associated with traditional tax filing methods.
 Technology Providers. Technology providers serving micro enterprises in the tax compliance sector can utilize the findings of this study to refine their
offerings and address specific needs identified among micro enterprises in Angeles City. By customizing their products and services to better align with the
requirements and concerns of micro enterprises taxpayers, technology providers can enhance the value proposition of their solutions and attract a broader
client base.
 Future Researchers. This study contributes to the existing body of research on technology adoption and tax compliance, particularly within the micro
enterprises’ context. By offering insights into the factors influencing micro enterprises’ willingness to adopt e-filing systems and their overall influence on
tax compliance, it enriches the academic discourse on the convergence of technology and taxation. Researchers can build upon this foundation to explore
related topics and further advance knowledge in this field.
REVIEW OF RELATED LITERATURE
Influence of Technology
According to Katua (2019), digital technology is a strong management tool, but tax administration's experience with it has often been complex and, at
times, ineffective, although technology appears to be the most important factor, the human factor should not be underestimated. This shows the potential of digital
technology as a powerful management tool, as well as the problems that tax administrations have in properly leveraging its possibilities. Regardless of its apparent
significance, the remark underscores the critical need of human involvement and experience in guaranteeing the viability and efficiency of digital tax systems,
implying that technology alone may not be sufficient in the absence of competent human monitoring and utilization. It proposes a balanced approach that
incorporates both technical improvements and human resources to obtain best tax administration results. The research suggested that a greater use of the Kenya
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Revenue Authority (KRA) tax system's resources, such as real-time and data analytics, enables SMEs to make remittances promptly, shielding them from potential
penalties associated with noncompliance. The study's findings indicated that digitization of tax administration has a positive association with tax compliance. The
research also mentions how SMEs have benefited from the information on the digital platform when it comes to assessing tax trends and possible task risks so they
can take the appropriate safety measures.
According to Sulistyono and Mappanyukki’s (2022) study, under the factor Tax Digitization System which resulted in an average value index of
88.30%, which falls within the high interpretation category, corporations usually considered that the Tax Digitization System provides major benefits in terms of
tax compliance. The findings indicated that such a system positively and effectively solves a variety of tax processes, including calculation, ease of filing and
payment, reporting, and compliance control. Moreover, Mashauri's (2021) study exploited the impact of technology on tax compliance among SMEs in Tanzania. It
focuses on assessing the influence of variables such as technology literacy, system security concerns, and system quality on SMEs' tax compliance. Through a
survey method involving 144 respondents, the study uncovered that technology literacy and system quality have a significant impact in the tax compliance of
SMEs. However, while security concerns do influence taxpayers, their contribution to tax compliance was found to be not statistically significant.
E-Filing Tax Compliance
According to Pranoto et al. (2023), the COVID-19 pandemic has prompted the government to digitally modernize the delivery of tax services, such as
e-filing. The online tax reporting system, often known as e-filing, exists because traditional tax reporting is inconvenient and impractical. The e-filing system
enables taxpayers to prepare, review, and pay their taxes online. Governments around the world are making significant investments in information technology to
provide residents with online public services. E-Filing and e-Form are two types of online public tax filing systems that were implemented in Indonesia in 2007 and
2017, respectively. Investing in the e-tax system may reduce tax evasion in developing countries, as seen by the higher tax ratio following e-tax filing adoption. In
addition to providing clients with quick access and personalized services, public service transformation via electronic technologies reduces government spending
and increases public trust. The implementation of the e-tax system was shown to have a significant influence on tax compliance (Saptono et al., 2023).
According to ESCAP (2022), the Electronic Filing and Payment System (eFPS) was introduced by the Bureau of Internal Revenue (BIR) of the
Philippines in 2001 in accordance with the Electronic Commerce Act of 2000. The main purpose of the said enactment is to offer a digital platform to file tax
returns conveniently. The system efficiently processes tax related data and confirms the submission. There are several benefits in using the modern method—
digitalization of tax filing. For starters, it accelerates tax data processing, resulting in faster and more accurate dealing. Furthermore, it lowers paper waste by
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eliminating the need for tangible papers to be printed and shipped. E-Filing also increases productivity by optimizing the whole tax filing procedure. For taxpayers,
they can digitally file their tax returns at any time and from any location by using e-Filing.
According to Mbise and Baseka (2023), it emphasizes that through digitization, SMEs were able to identify or pinpoint the issues and significant
transactions. Therefore, the use of digitization serves as a major factor since it reduces tax risks, particularly in terms of identifying problematic transactions or
issues as well as proper management of tax data. Thus, it is revealed that a mean of 3.867 and standard deviation of .626 represents that digitization has safeguarded
or protected the SMEs from tax risks related to compliance. The study investigates the influence of the digital tax administration system on compliance among
SMEs in Tanzania.
The research reveals a significant association between digital tax administration and compliance based on a sample of 133 SMEs randomly selected
from a total of 254. Tax data analytics and electronic filing emerge as positively impacting compliance, with respective average means of 3.583 and 3.612.
Subsequently, referring to Dwitrayan's research,
Kusumawardhani et al. (2023), formulated a hypothesis suggesting a positive impact of e-filing on tax compliance. Their study provides empirical support for this
hypothesis, concluding that the implementation of efficient e-filing systems increases individual taxpayers’ compliance. Furthermore, the study suggests that
taxpayers are more likely to comply when using e-filing due to its convenience, resulting in reduced expenditures associated with tax compliance.
Moreover, according to the study of Wibawa et al. (2021), it is proven that the use of e-Filing has a positive effect on the tax compliance of SMEs
taxpayers. The idea of compliance is further supported by the significance of ease of using e-Filing by SMEs since it assists the taxpayers in order to meet their tax
obligations. It asserts that using e-Filing ensures that SMEs taxpayers keep filing their tax due and also shows or demonstrates how SMEs taxpayers may easily
utilize the e-Filing system.
According to the research conducted by Mwqangangi and Memba (2022), the majority of the respondents (119 out of 149 people) indicated that online
tax filing ensures tax compliance by small and medium-sized enterprises, representing 79.9%. Then, 84.6% of the respondents agreed that online filing has
improved compliance levels, with a mean score of 4.074. Therefore, the results show that online tax filing plays a significant role in ensuring tax compliance
among SMEs in Kitui County.
In the study of Mathenge and Abdul (2021), tax technological reforms by the Kenya Revenue Authority have greatly impacted tax compliance among
SMEs in Nyeri County. With a mean adoption rate of 3.53 it shows that the most widely adopted innovation is the I-tax system, with the least being the Electronic
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Tax Register. Respondents reported that technical tax improvements, such as E-filing, had significantly improved SMEs' tax compliance by saving time and
money.
On the other hand, Wambongo’s (2019) study investigated the influence of online tax filing on tax compliance among small and medium enterprises. It
focuses on assessing the impact of variables such as online tax filing, computer literacy levels, online tax system stability, and security risks on SMEs’ tax
compliance. The study utilized questionnaires with 98 respondents, comprising registered SMEs within Nairobi's Central Business District (CBD). Based on the
collected data, the study shows that online tax filing, computer literacy, and security risks significantly and positively influence tax compliance. According to the
study of Tracey et. al. (2020), micro-enterprises utilizing the e-filing system had a positive experience with it. Hence, most indicated that it significantly reduced
costs and saved time in the tax compliance process. Their research findings suggest that the system has the potential to enhance the rate at which micro enterprises
adhere to tax regulations by submitting tax information and fulfilling tax obligations.
Computer Literacy and Advantages
According to Wibawa et al. (2021), the development of individual mindsets is influenced by the level of readiness in terms of information technology.
It points out that the Micro-Enterprises taxpayers' technological readiness represents a condition or a state where every taxpayer is prepared and willing to utilize or
implement technology advancement effectively. In line with the findings of Wibawa, it indicates that the level of technological readiness does not affect the
taxpayer's compliance level since Micro-Enterprises taxpayers were failing to receive any benefit if they have technology investment as supporting factor on how
Micro-Enterprises taxpayers fulfill or carry out their tax obligations.
Meanwhile, according to Kagendo (2019), the findings regarding the importance of technical skills on Online Tax Filing revealed that the Micro-
Enterprises taxpayers could correctly calculate their obligation taxes and penalties or payable through the use of their spreadsheet skills. Thus, a similar study by
Mpinganjira (2015) as cited in Kagendo (2019), wherein it is stated that there has been increase in effectiveness of filing taxes on tax compliance of Micro-
Enterprises in South Africa after the government introduced and implemented trainings on taxpayers in order to learn the process on how to file their taxes in
efficient and effective way.
In the study by De Castro et al. (2015), it states that there was an assessment of Batangas City Micro-Enterprise owners' awareness regarding online
BIR filing and tax payment. Small and medium-sized business owners frequently face issues such as computer literacy and data security. Depending on their age
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and degree of computer and internet literacy, Micro-Enterprise owners have varying levels of awareness. The purpose of the suggested action plans was to raise the
awareness of Batangas City's Micro-Enterprise owners.
In a more specific note, the country's inadequate cybersecurity is a major weakness in the e-tax system and when not delivered attention to may
significantly reduce compliance levels as taxpayers feel dissatisfied with the system, leading to noncompliance behaviors. The absence of a strong cybersecurity
causes the risks inherent in the e-tax system, revealing a key shortcoming. Failure to address this issue swiftly might drastically reduce compliance rates, this
discontent may develop an ethic of noncompliance, creating significant hurdles to effective tax administration.
Security Risks
According to Oluka and Nomlala (2021), one of the non-demographic factors that influenced SMEs to utilize e-filing was the filing system's confidence
and security. The software's assurance of confidentiality and privacy of online information encourages more taxpayers to continue using the tax filing system,
thereby increasing their trust in fully utilizing e-filing for tax compliance. As a result, small business taxpayers report that online security influences their use of e-
filing systems. Knowing that e-filing involves sensitive taxpayer information makes secure transactions even more important.
According to Chisala (2021), it is revealed in their findings that Small and medium-sized enterprises voiced concerns about online security. Fear of
security breaches, as numerous SMEs feared their accounts might be hacked. The risk of security breaches may influence SMEs' adoption and use of e-filing
solutions for tax compliance. Despite the convenience and efficiency provided by electronic filing, SMEs may be hesitant to fully adopt these platforms if they
believe they are not secure. Concerns about the security of their financial data and sensitive information may prompt SMEs to return to traditional tax filing
techniques, such as physical paperwork or in-person submissions, despite their inherent constraints in terms of time and resources.
Furthermore, according to Wambongo (2019), in line with the result of the study, it is stated that there is a strong relationship between availability of
security risks and tax compliance where 1.6 on 5-point scale represents the majority of SMEs taxpayers agreed that security risk has an influence on tax
compliance. The findings also indicate that SMEs taxpayers were indifferently uncomfortable disclosing the business information to virtual attendees and
information disclosed to the third parties such as using internet technology for filing taxes may affect personal security risk. It was also agreed by the SME
taxpayers with the result of the study that cyber attendants or virtual attendees may not be professional when it comes to disclosing information to third parties.
RESEARCH GAP
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The assessment of digital factors influencing the level of tax compliance has been explored in various countries. However, tax compliance regulations
vary globally due to differences in legal frameworks, administrative practices, and socio-economic contexts (Organisation for Economic Co-operation and
Development, 2020). While studies in the Philippines have examined the impact of e-filing on tax compliance, they have not specifically investigated the influence
of digital factors on micro-enterprise taxpayers' compliance. Therefore, this research aimed to fill this gap by examining the digital factors that influence the level
of tax compliance behavior among micro-enterprises in Angeles City.
Existing literature has highlighted the general influence of digital factors in tax administration systems in places like Nairobi, Tanzania, and Kenya.
However, this study was unique in its examination of the local factors in Angeles City, including socio-economic, technological, and regulatory influences on the
tax compliance of micro-enterprises. Although security concerns and associated costs had been briefly discussed in previous studies, a comprehensive examination
of these factors and their influence on compliance behavior in Angeles City was lacking.
Specifically, this research examined the effectiveness of e-filing systems, the role of computer literacy, assessment of security risks, and how perceived
vulnerabilities influenced micro-enterprises’ willingness to adopt e-filing technologies. Ultimately, it aimed to gauge the overall influence of digital factors on the
level of tax compliance among micro-enterprises in Angeles City.
RESEARCH FRAMEWORK
This framework shall conceptualize the impact of e-filing and the influence of technology on tax compliance. Hence, it is established that the major
variable which is tax compliance shall be considered dependent on the variables; e-filing, security risks and computer literacy and advantage. The independent
variable digitalization characterized based on their importance on attained tax compliance dimension.
Figure 1
Research Framework
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The study conceptual framework in Figure 1 above represents the impact of digitalization to tax compliance, which constituted three (3) independent
variables; e-filing, computer literacy and advantages, and security risks. The independent variables will explore various factors which include the extent of how
micro enterprises in Angeles City adopted e-filing systems as part of their digital technologies and how digital factors including e-filing impact their overall tax
compliance.
HYPOTHESIS
1
Ho : E-filing does not have a significant influence on tax compliance among microenterprises in Angeles City.
2
Ho : Computer literacy does not have a significant influence on tax compliance among microenterprises in Angeles City.
3
Ho : Security risks do not have a significant influence on tax compliance among microenterprises in Angeles City.
METHODS
Research Design
The researchers employed a quantitative method in this study. This approach was utilized throughout the data collection, analysis, and interpretation
phases as cited in Mbise and Baseka (2023), wherein this method was used to measure the efficiency of digital tax systems for Micro-Enterprise taxpayers in An-
geles City. It is determined that the quantitative approach is adequate for gathering sufficient and pertinent data for addressing the research questions presented in
this study as it attempts to evaluate the efficiency of digital tax compliance among micro-enterprises. Therefore, the quantitative approach is one of the best tech-
niques or most effective method for accepting and rejecting hypotheses as cited in Iqbal et al. (2023).
In addition, this study has also utilized descriptive research design wherein it serves as a fundamental variability included in sets of actual observations
or scores. Mugenda and Mugenda (2013) as cited in Mutinda (2022), emphasize that descriptive research design determines and ascertains principles, attributes,
and characteristics of such entities since it enables the researchers to collect and gather detailed information from the population being studied. Furthermore, this
research is a type of causal study that examines the causal relationship between the independent variables (e-filing, security risk, and computer literacy and ad-
vantages) and the dependent variable (tax compliance). Furthermore, it investigates moderating variables that may either enhance or weaken these relationships
between said variables (Meita and Malau, 2023).
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Sampling and Setting
The researchers employed random sampling techniques among the micro-enterprises operating within Angeles City, specifically targeting those who
were business registered. As stated in the study of Noor, Tajik, and Golzar (2022), simple random sampling is a method of probability sampling that allows re-
searchers to randomly select participants for their study without any bias. Eligible participants included micro-enterprises complying with tax administration in
Angeles City, either manually or utilizing e-filing for tax compliance.
Furthermore, in determining the sample size, the researchers utilized the Raosoft online calculator. To reduce the number of respondents needed due to
some limitations, the researchers adapted the computation method similar to that used by Castro et al. (2015). Using Raosoft Sample Size Calculator, the re-
searchers determined that the study required 164 respondents from the 14,158 micro-enterprises within Angeles City (see Appendix E), as reported by the De-
partment of Trade and Industry, with a 10% margin of error and a 99% confidence level. Additionally, to obtain the most recent data on the total number of micro
enterprises in Angeles City for the year 2024, the researchers emailed the Department of Trade and Industry (DTI) and received the updated list, ensuring the ac-
curacy and relevance of the sample size calculation.
Survey Instruments
Aligned with the rationale of this study, the researchers utilized structured questionnaires in conducting a survey aimed at gathering responses from mi-
cro-enterprises. As noted by Taherdoost (2022), questionnaires serve as vital tools in research endeavors, enabling researchers to gather pertinent data pertaining
to their study subject. These responses were crucial for researchers to effectively achieve their objectives. The researchers adapted and incorporated questions
from existing research papers' questionnaires. Additionally, the questionnaire underwent a review by experts in both research and taxation fields. The distribution
and collection of the survey were administered through Google Forms and physical copies were printed in case of inability to access the internet. The collected
data were then linked through a Google Sheet and physically answered questionnaires were also encoded and analyzed to derive the results.
The survey questionnaire is structured and divided into five sections to gather the necessary feedback and experience from respondents. The first
part contains the basic information of the respondents such as the Name of the Enterprise, Address, and its Methods of Tax Compliance whether it is a Manual,
E-Filing (online), or both Manual and E-Filing. Therefore, the basic information of the enterprise helped the researchers to understand and analyze the preferable
method in terms of tax compliance among the respondents in Angeles City.
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The succeeding part contains the assessment of each variable or factor. Provided that, these parts utilized a four-point likert scale. The scale ranges
from 1 to 4 and will be interpreted as follows: (1) Strongly Disagree, (2) Disagree, (3) Agree, and (4) Strongly Agree. The second part was adopted from De Cas-
tro (2015) and Odongo (2016), with the purpose to assess the influence of E-Filing system on tax compliance wherein it focuses on user experience, accuracy,
payment flexibility, real-time updates, server downtime, and as well as the challenges related to payment processes. The third part includes Computer Literacy
and Advantages which were adopted from Mashauri (2021) and Katua (2019) which also assess the Computer Literacy and technical integration in terms of taxa-
tion wherein it evaluates several aspects such as skills, support, savings, compliance, risk, awareness, and IT proficiency. The fourth part was adopted from
Mashauri (2021) and Wambongo (2019) which highlights the Security Risks. This section assesses the influence of e-filing on tax compliance risks and security
concerns, addressing the protection or safeguarding the business information and potential risks linked to third-party involvement in tax filings.
The last part of the survey questionnaire is the Tax Compliance that serves as a dependent variable for the study and was adopted from Edna (2021)
and Mbise and Biseka, and Katua (2019). This section aims to evaluate the extent to which an enterprise has adhered to various measures related to tax compli-
ance. To conclude, this study highlights the role of tax compliance in micro-enterprises in Angeles City wherein it employs insights or knowledge from various
research sources in order to conduct a detailed thorough assessment and comprehensive analysis of the said factors that influences the tax compliance.
Data Collection
The researchers employed a structured questionnaire to gather data during the study. Distribution and collection of the survey were facilitated through
printed questionnaires and
Google Forms. The responses were automatically linked to a Google Sheets file and subsequently analyzed to derive the results. For data collection, the re-
searchers conducted field visits around Angeles City to solicit participation from local enterprises. They employed a random sampling method to select various
businesses within accessible areas of the city.
Afterwards, during these visits, the researchers introduced themselves to the business representatives and explained the study's purpose, emphasizing
the significance of their participation while assuring the confidentiality and anonymity of their responses. The representatives were then asked if they were will-
ing to participate in the study. Upon agreement, the participants were provided with a printed questionnaire and/or link to the Google Form, or in some cases in-
terviewed. Some participants accessed the Google Form via the provided link, which contained a series of questions pertinent to the study, while the others an-
swered on the given printed questionnaires. They completed the form at their convenience, and the responses were automatically collected and organized in a
14
Google Sheets file. While the printed questionnaires and data gathered from interviews were then collated by the researchers and inputted it in the Google Form
for conveniences in data computations and analysis. Each response generated a new row in the Google Sheets, with individual question answers recorded in sepa-
rate columns. Upon completion of data collection, the researchers reviewed and cleaned the data to ensure accuracy and completeness. This prepared the dataset
for subsequent statistical tests and analysis.
Data Analysis
The study “Digital Factors Influencing the Level of Tax Compliance Among Micro Enterprises in Angeles City” utilized a combination of
descriptive analysis and multiple regression analysis to gain comprehensive insights into the influence of e-filing, technological influence such as computer
literacy, and security risks on tax compliance among micro enterprises in Angeles City. Accordingly, statistics can be used descriptively to illustrate the
characteristics of a group of observations, i.e., the raw data. Which are broken down into measures of central tendency and measures of variability.
Data is presented in a combination of graphs (figures), tables (tabular), calculations to summarize data (figures or graphs), and subsequent
interpretation through the grouping of data in the above-mentioned tables in terms of the objectives to determine trends and/or deviations from the answers in the
questionnaire (Kenton, 2019). This study utilized the Likert Scale as a rating system in its questionnaires, aiming to assess individuals' attitudes, opinions, or
perceptions. Respondents selected from a set of potential responses to questions or statements, which were typically assigned numerical values: "strongly agree
(1)," "agree (2)," "disagree (3)," and "strongly disagree (4)." This approach helped in illustrating the characteristics of the collected data and identifying trends or
deviations in tax compliance behavior.
Subsequently, multiple regression analysis is a statistical technique utilized to quantitatively examine the influence of e-filing and technological
factors on tax compliance. It helped the researchers evaluate the strength of the association between the dependent variable (tax compliance) and multiple
independent variables, as well as assess the significance of each independent variable to its relationship. In essence, it helped isolate the unique contribution of
each independent variable to its influence on the dependent variable while controlling for the effects of other independent variables.
Table 1
Likert Scale
Mean Value Point Verbal Interpretation
3.50 - 4.00 4 Strongly Agree
15
2.50 - 3.49 3 Agree
1.50 - 2.49 2 Disagree
1.00 - 1.49 1 Strongly Disagree
Note: Adapted from “Awareness on BIR E-Filing and Payment System: Basis for Efficient Revenue Transactions” by De Castro et. al, 2018.
ETHICAL CONSIDERATION
The study took into account the issues of confidentiality and intellectual property, which ensured that all information provided by participants was treated
with the utmost confidentiality and anonymity. All information was accessed by the members of this study and solely utilized for this research. The researchers
strictly adhered to the Data Privacy Act, or the Republic Act of 10173. Moreover, the research and data gathered relied on primary and secondary data that originated
from the participants and reliable websites. The information gathered comes from credible sources that are accurately acknowledged in the paper. Authors are cited
in the paper to give rightful credit, and the author’s references and data acquired were acknowledged through citation using the 7th edition of the American
Psychological Association Publication Manual. The research paper has undergone an anti-plagiarism tool to ensure that the paper is created with contents that are
original, authentic, quality, and not pirated. Furthermore, the research also has no goal of harming the reputations of the enterprises included in the study and no
intention of being utilized for any other purpose. The main objective of this research is to address the research questions proposed for academic purposes.
RESULTS
Table 2
Respondents’ Method of Tax Compliance
Method of Tax Compliance Frequency Percent
Manual Filing 89 59.73%
Online Filing 55 36.91%
Manual & Online Filing 5 3.36%
The table shows the number of micro enterprises in Angeles City, which are the respondents of this study. The total number respondents who
answered Manual Filing is 89 (59.73%), while the total number of Online Filing respondents is 55 (36.91%), and the total number of Manual & Online Filing
respondents is 5 (3.36%). In summary, the total respondents of the study are 149 micro enterprises.
Level of E-Filing
16
Table 3
The Level of E-Filing
Statements Mean Interpretation
EF1 3.37 Agree
EF2 3.27 Agree
EF3 3.20 Agree
EF4 3.25 Agree
EF5 3.08 Agree
EF6 3.23 Agree
EF7 3.30 Agree
EF8 3.15 Agree
EF9 3.13 Agree
EF10 3.07 Agree
EF11 3.10 Agree
Weighted Mean 3.20 Agree
Note: See Appendix D for the survey questionnaire statements regarding E-Filing.
The table shows the level of e-filing (EF) satisfaction among respondents. It indicates that respondents strongly agreed that the system is convenient to use
(M = 3.37), facilitates interactive and immediate information exchange and feedback during filing or e-payments (M = 3.27), and makes tax compliance easier (M =
3.30).
Respondents also agreed that e-filing minimizes errors (M = 3.20), provides quicker response times (M = 3.25), ensures accuracy and reduces errors (M =
3.08), offers flexible payment options (M = 3.23), results in more accurate payments (M = 3.15), updates the ledger in real time (M = 3.13), server downtime disrupts
payments (M = 3.07), and is stressful during due dates (M = 3.10). The overall weighted average was 3.20, which is interpreted as “Agree.”
The statement that the e-filing system is convenient to use received the highest mean score of 3.37, interpreted as “Agree.” On the other hand, the
statement that server downtime significantly disrupts online payments received the lowest mean score of 3.07, interpreted as “Agree”.
Level of Computer Literacy
Table 4
17
Level of Computer Literacy
CL1 3.30 Agree
CL2 3.25 Agree
CL3 3.13 Agree
CL4 3.12 Agree
CL5 3.17 Agree
CL6 3.18 Agree
CL7 3.17 Agree
CL8 3.18 Agree
CL9 3.17 Agree
CL10 3.28 Agree
Note: See Appendix D for the survey questionnaire statements regarding computer literacy.
The table shows the respondents' self-assessment of their proficiency and skills related to their level of computer literacy. Respondents strongly agreed
that they are proficient in internet usage (M = 3.30) and find the language used in taxation devices and systems easy to understand (M = 3.28).
Respondents also agreed that they have the necessary skills in using computers and devices (M = 3.25), basic computer troubleshooting skills (M =
3.13), and an understanding of the tax system navigation process (M = 3.12). They are comfortable using self-help menus on tax systems or devices (M = 3.17)
and can determine successful applications in taxation (M = 3.18). Additionally, respondents agreed that they receive adequate training in newly introduced
technology in taxation (M = 3.17), find technical assistance helpful when they fail to use tax devices or systems (M = 3.18), and understand instructions for new
devices and systems used in taxation (M = 3.17). The overall weighted mean was 3.20 which is interpreted as "Agree."
The statement that respondents are proficient in internet usage received the highest mean score of 3.30, interpreted as “Strongly Agree.” On the other
hand, the statement that respondents understand the tax system navigation process received the lowest mean score of 3.12, interpreted as “Agree.”
Level of Computer Literacy and Advantages
Table 5
Level of Computer Advantages
18
CA1 3.18 Agree
CA2 3.27 Agree
CA3 3.25 Agree
CA4 3.17 Agree
CA5 3.23 Agree’
CA6 3.20 Agree
CA7 3.02 Agree
Note: See Appendix D for the survey questionnaire statements regarding E-Filing.
The table shows the level of computer advantages among respondents. Respondents agreed that their organization is committed to adopting modern
technology to improve its business activities (M = 3.18), that considerable time is saved because of technology employed in tax administration (M = 3.25), and
that full compliance has prevented the business from unnecessary disruptions by tax agents, thus enabling it to plan (M = 3.17). They also agreed that with
digitization, the business properly manages various risks due to the availability of information in the public domain (M = 3.23), that top management in their
organization is aware of the benefits of technology in enhancing tax compliance (M = 3.20), and that their firm has competent IT staff that can transform the
organization towards digitization (M = 3.02). The overall weighted mean was 3.19, which is interpreted as “Agree.”
The statement that online taxation has reduced filing costs considerably received the highest mean score of 3.27, interpreted as “Agree.” On the other
hand, the statement that the firm has competent IT staff that can transform the organization towards digitization received the lowest mean score of 3.02,
interpreted as “Agree.”
19
Level of Security Risk
Table 6
Level of Security Risk
SR1 3.12 Agree
SR2 3.07 Agree
SR3 3.13 Agree
SR4 3.17 Agree
SR5 2.65 Agree
SR6 2.23 Disagree
SR7 2.17 Disagree
SR8 2.27 Disagree
Note: See Appendix D for the survey questionnaire statements regarding security risks.
The table shows the level of security risk perceptions among respondents. Respondents agreed that digitization has safeguarded the business from tax
compliance risks (M = 3.12), enabled the organization to identify problematic transactions, thus increasing accountability in making tax submissions (M = 3.07),
and reduced the risks associated with specific business transactions undertaken by the company (M = 3.13). They also agreed that they are uncomfortable
revealing business information to cyber attendants for assistance in tax filing (M = 2.65).
However, respondents disagreed with the idea that information revealed to third parties, such as cyber attendants during tax returns, may place the
business at risk (M = 2.23), may get to competitors (M = 2.17), or may place personal security at risk (M = 2.27). The overall weighted mean was 2.73, which is
interpreted as “Agree.”
The statement that with digitization, the business properly manages various risks due to the availability of information in the public domain received the
highest mean score of 3.17, interpreted as “Agree.” On the other hand, the statement that information revealed to third parties, such as cyber attendants during tax
returns, may get to competitors received the lowest mean score of 2.17, interpreted as “Disagree.”
Level of Tax Compliance
20
Table 7
Level of Tax Compliance
TC1 3.42 Agree
TC2 3.37 Agree
TC3 3.32 Agree
TC4 3.28 Agree
TC5 3.15 Agree
TC6 3.28 Agree
TC7 3.20 Agree
TC8 3.35 Agree
TC9 1.67 Disagree
TC10 3.48 Agree
TC11 3.28 Agree
TC12 3.27 Agree
TC13 3.40 Agree
Note: See Appendix D for the survey questionnaire statements regarding tax compliance.
The table shows the level of tax compliance among respondents. Respondents strongly agreed that they consistently filed tax returns before submission
(M = 3.42), made timely tax payments (M = 3.37), and provided accurate business information (M = 3.32). They demonstrated a willingness to pay taxes and
penalties (M = 3.28), made efforts to minimize revenue loss (M = 3.28), and completed tax-related tasks online and on time (M = 3.27). Respondents also
strongly agreed that the business increased its tax compliance level (M = 3.40), understood the benefits of adhering to tax compliance laws (M = 3.35), and made
timely payments of owed taxes without facing enforcement actions (M = 3.28). Additionally, respondents agreed that their business has shown an increase in
taxes paid (M = 3.15) and fairly distributed the tax burden (M = 3.20). The overall weighted mean was 3.19 which is interpreted as “Agree.” The statement that
the business does not engage in any tax evasion activities received the highest mean score of 3.48, interpreted as “Agree.” On the other hand, the statement that
respondents would choose not to file their returns if given the opportunity received the lowest mean score of 1.67, interpreted as “Disagree.”
21
SIGNIFICANT INFLUENCE BETWEEN VARIABLES
Table 8
Significant Influence between Tax Compliance and the Digital Factors
Tax Compliance
Criteria Estimate F-statistic P-value Analysis
E-Filing 0.3234 0.002 Significant
Computer Literacy 0.5272 26.5 <0.001 Significant
Security Risk 0.0346 0.795 Not Significant
The null hypothesis of no significant positive linear relationship between independent variables (e-filing, computer literacy and advantages, security
risk) and tax compliance is rejected because its significance f-value of <0.001 is less than .01 level of significance. This means that at least one of the
independent variables has significant positive linear relationship with tax compliance. In particular, e-filing and computer literacy and advantages has significant
positive linear relationship with tax compliance as its p-value of <0.001 and 0.002 is less than .01 level of significance; while security risk has p-value of 0.795 is
greater than .01 level of significance.
The F-statistic shows a value of 26.5 in a df1of 3 and df2 of 56 showing a critical value of approximately 4.771 with an alpha of 0.01, this indicates that
the regression model as a whole is significant. The data shows that for every one unit increase in e-filing, computer literacy and security risk, leads to a 0.3234,
0.5272, 0.0346-point increase in tax compliance respectively with an intercept estimate of 0.3794.
DISCUSSION
CONCLUSION
The primary purpose of this study is to evaluate the influence of digital factors on tax compliance levels among microenterprises in Angeles City.
Specifically, it examines the use of e-filing, computer literacy, and security risks. The study aims to determine the extent to which these microenterprises have
implemented e-filing systems in their digital tax compliance strategies. Additionally, it explores the broader influence of technology on tax compliance, with a
focus on e-filing, computer literacy and its benefits, and security risks.
22
The majority of respondents in this study, microenterprises in Angeles City, utilize manual tax compliance methods. 55 out of 149 respondents have
adopted online filing systems, and another 5 uses both manual and online methods to adhere to tax compliance. The researchers have concluded that e-filing and
computer literacy, along with its associated advantages, significantly influence the tax compliance of micro enterprises in Angeles City.
In contrast, security risks do not appear to impact their level of tax compliance. Based on the results, the researchers suggest that e-filing and
technology significantly enhance the overall tax compliance of microenterprise taxpayers in Angeles City. This study demonstrates that these three independent
variables—e-filing, computer literacy, and security risks—play a crucial role in increasing the level of tax compliance among micro enterprises in Angeles City.
RECOMMENDATION
Based on the discussion of the research findings, several recommendations are proposed for government agencies, SMEs, technology providers, and future
researchers.
Government agencies, particularly the Bureau of Internal Revenue (BIR) in the Philippines, should continue to enhance their e-filing systems. Given that
security risks are not a significant concern for microenterprises in Angeles City, maintaining and further developing robust security measures is crucial to sustain
trust. Regular updates and user-friendly interfaces will encourage more microenterprises to adopt e-filing systems. Additionally, government agencies should
implement and promote computer literacy programs specifically designed for microenterprise owners. Workshops, seminars, and online courses can help business
owners and their employees become more proficient with digital tools, enhancing their ability to comply with tax regulations. Introducing incentives for
microenterprises that utilize e-filing systems, such as tax deductions, reduced filing fees, or recognition programs for exemplary digital compliance, could further
boost tax compliance.
Microenterprises in Angeles City should take advantage of the e-filing systems offered by government agencies. Adoption of these systems not only
streamlines the tax compliance process but also reduces the likelihood of errors compared to manual filing methods. SMEs should invest in training programs to
enhance their employees’ computer literacy, understanding the benefits and operation of e-filing systems to improve compliance rates and operational efficiency.
While security risks were not found to significantly influence tax compliance levels, it is still essential for microenterprises to regularly evaluate and mitigate any
potential security vulnerabilities. Implementing strong cybersecurity practices will ensure that sensitive information remains protected.
Technology providers should focus on developing intuitive and user-friendly e-filing solutions tailored to the needs of microenterprises. Simplified
interfaces and clear instructions can facilitate easier adoption and use. Continuous improvement of security features within e-filing systems is crucial, with providers
23
integrating advanced encryption methods and regularly updating security protocols to protect users’ data and maintain their trust in digital solutions. Providing
comprehensive support and training for users can significantly enhance the effectiveness of e-filing systems, and technology providers should offer resources such as
tutorials, help desks, and customer service to assist microenterprises in utilizing their products effectively.
Future research should consider longitudinal studies to assess the long-term impacts of e-filing and technology adoption on tax compliance among
microenterprises. This approach can provide deeper insights into trends and changes over time. Expanding the geographical scope of research to include other cities
or regions can provide a more comprehensive understanding of how digital factors influence tax compliance across different contexts and environments. Researchers
should also explore additional digital factors that may affect tax compliance, such as the role of mobile applications, cloud-based accounting systems, and artificial
intelligence. Understanding the broader spectrum of digital tools can help identify new ways to enhance tax compliance. These recommendations, grounded in the
study’s findings, aim to improve tax compliance among microenterprises through the effective use of digital technologies, thereby benefiting government agencies,
SMEs, technology providers, and future researchers.
24
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APPENDICES
APPENDIX A: LETTER OF REQUEST
Letter of Request
To whom it may concern,
The undersigned are working for a research project entitled “Digital Factors Influencing the Level of Tax Compliance among Micro Enterprises in
Angeles City” in partial fulfillment of the requirements for the degree in Bachelor of Science in Management Accounting.
In line with this, we would like to request from your good office the total number of registered micro enterprises in Angeles City to allow us to
determine the sample size of our respondents. We will be attaching a copy of the approved letter from the Dean’s Office once signed. Rest assured that all the
information you provide is protected by RA 10173 Data Privacy Act. This is subject only for academic use. For more information, feel free to message us in these
numbers, or through email address:
+639530487231; ksdavid1@student.hau.edu.ph
+639189412973; jlibaez@student.hau.edu.ph
Respectfully yours:
Bagang, Jennicxer D. David, Kristine S.

Proponent Proponent
Ibañez, Josh Amram L. Manaloto, Joana Sophia D.
Proponent Proponent
Tanglao, Allyza U. Tayag, Kristine Mae S.
Proponent Proponent
Trinidad, Shyanna Lexine T.
Proponent
APPENDIX B: APPROVAL SHEET
School of Business and Accountancy
#1 Holy Angel Avenue, Sto. Rosario, Angeles City, 2009 Pampanga
APPROVAL SHEET
This research entitled “Digital Factors Influencing the Level of Tax Compliance Among
Micro Enterprises in Angeles City” was prepared and submitted by Bagang, Jennicxer D., David,
Kristine S., Ibañez, Josh Amram L., Manaloto, Joana Sophia D., Tanglao, Allyza U., Tayag, Kristine Mae S., Trinidad, Shyanna Lexine T. for the degree, Bachelor
of Science in Accountancy has been examined and in recommended for acceptance and oral examination.
28
Mr. Gian Carlo N. Catahum, CPA, MBM
Accounting for Research and Methods Adviser
ORAL EXAMINATION
Approved by the Committee on Oral Examination with a grade of_________________ on June 01, 2024.
Mr. Louis Philippe Simbulan
Chair
Ms. Loren Aina Trinidad
Member
APPROVAL
Accepted and approved in partial fulfillment of the requirements for the degree,
Bachelor of Science in Management Accounting
Dr. Albert G. Morales
Dean, School of Business and Accountancy
29
30
APPENDIX C: LETTER OF CONSENT
“Digital Factors Influencing the Level of Tax Compliance

Among Micro Enterprises in Angeles City”
Dear Participant,
Thank you for agreeing to participate in this research study focusing on the digital factors influencing the level of tax compliance among micro-
enterprises in Angeles City. Your valuable insights will contribute significantly to understanding the dynamic relationship between digitalization and tax compliance
in the micro-enterprise sector.
This questionnaire is designed to gather information about your experiences, perceptions, and practices regarding digital technologies and tax
compliance within your micro-enterprise. Your responses will remain anonymous and confidential, and the data collected will be used solely for research purposes.
Your participation is entirely voluntary, and you may withdraw from the study at any time without penalty. By completing this questionnaire, you are
providing consent for the use of your responses in this research study.
Thank you for your time and contribution!
____________________________________________________________________________
rd
I hereby agree in the research undertaking of the 3 year Accountancy students from Holy Angel University. My participation is voluntary without any
remuneration and that I have the right to withdraw at any time should I object to the nature of the research. I further understand that:
 I will be accomplishing a self-assessed questionnaire to help provide the data needed to answer the research questions of this study;
 My identity and all the data I will provide will be handled with anonymity at all times;
 I am entitled to ask questions about this research; and
 I will be given an opportunity to learn about the result of this research, which may be useful to me.
____ I agree and I am willing to participate.
____ I am not willing to participate.
____________________________________
Signature over Printed Name of the Participant
Date:
APPENDIX D: QUESTIONNAIRES
Instruction: Kindly indicate your level of agreement with the statements provided. Please rate the following statements based on your experience. Thank you!
Name of the Enterprise: ____________________________________
Address: _________________________________________________
Methods of Tax Compliance:
31
___ Manual tax compliance
___ Online filing
___ Others: Specify _______________
Legends:
1. Strongly Disagree 2. Disagree 3. Agree 4. Strongly Agree
I. E-FILING
The study aimed to assess e-filing systems' influence on tax compliance, focusing on user experience, accuracy, and payment flexibility, while also
considering real-time updates, server downtime, and the challenges related to payment processes.
E-Filing 1 2 3 4
The system (e-filing) is convenient to use.
Information exchange and feedback during enrollment, e-filing, or e-payments

is immediate and online.
Errors are minimized because the system validates all taxpayer-supplied

information before final submission.
The response or acknowledgment time is quicker compared to manual filing.
The system ensures accuracy, reducing the chance of errors to about 1% when
e-filing.
Flexible payment arrangements are available.
E-Filing 1 2 3 4
E-filing makes tax compliance easier.
Paying tax online results in more accurate payments.
Online payments update taxpayers' ledger in real time.
Server downtime significantly disrupts online payments.
Accessing online payments during due dates is very stressful.
II. COMPUTER LITERACY AND ADVANTAGES
The study sought to assess computer literacy and technical integration in taxation: skills, support, savings, compliance, risk, awareness, and IT proficiency.
Computer Literacy 1 2 3 4
32
Proficiency of internet usage
Computer/devices usage skills
Basic computer troubleshooting skills
Understanding of tax system navigation process
Use self-help menus on tax system or devices
To determine successful application in taxation
Training in new introduced technology in taxation
Technical assistance while failed to use tax devices or systems
Instruction of new devices and system used in taxation
Language used in devices and systems of taxation
Computer Advantages 1 2 3 4
Our organization is committed to adopting modern technology to improve its business

activities
Online taxation has reduced filing costs considerably
Considerable time is saved because of technology employed in tax administration
Full compliance has prevented the business from unnecessary disruptions by tax agents thus
enabling it to plan
With digitization, the business properly manages the various risks due to the availability of
information on public domain
The top management in our organization is aware of the benefits of technology in

enhancing tax compliance
Our firm had competent IT staff that can transform the organization towards digitization
III. SECURITY RISKS
The study wants to assess the influence of e-filing on tax compliance risks and security concerns, including the safeguarding of business information and
potential risks associated with third-party involvement in tax filings.
Security Risk 1 2 3 4
Business data are secure for being stored on the internet
33
Business data is in danger of being accessed by other system users
System hacking/attacking can lead to lose business data
Business data is susceptible to being tampered with by employees
Security Risk 1 2 3 4
Uncomfortable revealing business information to cyber attendants for assistance in tax

filing
Information revealed to third parties e.g. cyber attendants during tax returns may place
business
Information revealed to third parties e.g. cyber attendants during tax returns may get to my
competitors
Information revealed to third parties e.g. cyber attendants during tax returns may place my
personal security at risk
IV. TAX COMPLIANCE
The study aimed to evaluate the extent to which the business/enterprise has adhered to various measures related to tax compliance.
Tax Compliance 1 2 3 4
Consistently filed tax returns before submission.
Consistently made timely tax payments.
Consistently provided accurate business information.
Demonstrated willingness to pay taxes and penalties.
Shown an increase in taxes paid.
Made efforts to minimize revenue loss.
Fairly distributed the tax burden.
34
The business understands the benefits of adhering to tax compliance laws.
I would choose not to file my returns if given the opportunity.
The business does not engage in any tax evasion activities.
The company makes timely payments of owed taxes without facing enforcement actions.
Tax-related tasks are completed online and on time
The business increased its tax compliance level.
35
APPENDIX E: RAOSOFT.COM RECOMMENDED SAMPLE SIZE
36
APPENDIX F: CURRICULUM VITAE
JENNICXER D. BAGANG
rd
3 year | Management Accounting
427, Maligaya Street Sto Niño San Simon Pampanga
0936-603-6884 | jdbagang@student.hau.edu.ph
EDUCATION
College | Bachelor of Science in Management Accounting 2021 - Present
Holy Angel University | Angeles City, 2009
Senior High School | Accountancy Business and Management (ABM) 2019-2021
St. Augustine Institute of Pampanga | Angeles City, 2009
Junior High School 2015-2019
St. Augustine Institute of Pampanga | Angeles City, 2009
TRAINING EXPERIENCES
Xero Advisor Certified 2022
SAP Business One 2023
Juan D. Nepomuceno, Inc. Present
Accounting Administration Intern | Angeles City, 2009
ACHIEVEMENTS AND AWARDS
Junior High School Valedictorian 2017 - 2018
Senior High School Valedictorian 2020 - 2021
College Dean’s Lister 2021 – 2022 & 2023
SKILLS & INTERESTS
Language English, Filipino, and Kapampangan
Technical Word processing: Microsoft Word and Google Docs
Spreadsheets: Microsoft Excel and Google Sheets
Accounting Software: QuickBooks, Xero, and SAP Business One
Graphics and Presentations: PowerPoint and Canva
Jennicxer D. Bagang
KRISTINE S. DAVID
rd
Pulung Cacutud, Angeles City 2009
0953-048-7231 | ksdavid1@student.hau.edu.ph
37
EDUCATION
Republic Central Colleges | Angeles City, 2009
Bonifacio V. Romero High School | Angeles City, 2009
Channel Information Technology and Leasing Services, Corp. Present
Accounting Intern | Angeles City, 2009
Junior High School With Honors 2017 - 2019
Senior High School With Honors 2019 - 2020
Senior High School With High Honors 2021
SKILLS & INTERESTS
Kristine S. David
JOSH AMRAM L. IBAÑEZ

rd
Pulung Maragul, Angeles City 2009
0956-760-2233 | jlibaez@student.hau.edu.ph
EDUCATION
Senior High School | Business and Accountacy+ (BAC+) 2019-2021
Angeles University Foundation Integrated School | Angeles City, 2009
38
Angeles City Science High School | Angeles City, 2009
Scrubbed Global Services Present
SKILLS & INTERESTS
Josh Amram L. Ibañez
JOANA SOPHIA D. MANALOTO

rd
Cut-cut, Angeles City 2009
0936-115-5128 | jdmanaloto1@student.hau.edu.ph
EDUCATION
Republic Central Colleges | Angeles City, 2009
Angeles City National Trade School | Angeles City, 2009
39
Juan D. Nepomuceno, Inc. Present
Accounting-Treasury Intern | Angeles City, 2009
Senior High School With Honors 2019
Senior High School Outstanding Performance in Business Simulation 2021
SKILLS & INTERESTS
BPI Bizlink and NetSuite
Joana Sophia D. Manaloto
ALLYZA U. TANGLAO
rd
st
Sto. Domingo 1 , Capas, Tarlac
0956-690-1059 | autanglao@student.hau.edu.ph
EDUCATION
Senior High School | Humanities and Social Sciences (HUMSS) 2019-2021
STI College Tarlac | San Vicente, Tarlac City
Dominican College of Tarlac | Capas, Tarlac
University Scholar – Library Aide 2022 - Present
Holy Angel University Library | Angeles City, 2009
40
OAI General Merchandise Corporation Present
College Dean’s Lister 2021 – 2022
SKILLS & INTERESTS
Allyza U. Tanglao
KRISTINE MAE S. TAYAG

rd
Floridablanca, Pampanga 2006
0929-222-6151 | kstayag@student.hau.edu.ph
EDUCATION
Basa Air Base National High School | Floridablanca, Pampanga 2006
Mother Margherita de Brincat Catholic School | Dinalupihan, Bataan 2110
41
SKILLS & INTERESTS
Kristine Mae S. Tayag
42
SHYANNA LEXINE T. TRINIDAD

rd
Angeles, Pampanga
0976 409 6453 | yannalexinetrinidad@gmail.com
EDUCATION
Holy Family Academy – New Site| Angeles City, 2009
Holy Family Academy – Old Site | Angeles City, 2009
Quest Hotel & Conference, Clark Pampanga Present
Income Audit Staff | Angeles City, 2009
Senior High School With High Honors 2021
College Dean’s Lister 2021 – 2022
SKILLS & INTERESTS
Shyanna Lexine T. Trinidad
43

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HOLY ANGEL UNIVERSITY

Digital Factors Influencing the Level of Tax Compliance Among

Micro Enterprises in Angeles City

Presented to the Faculty

of the School of Business and Accountancy

Holy Angel University

of the Requirement for the Degree of

Bachelor of Science in Management Accounting

LIST OF TABLES AND FIGURES

HOLY ANGEL UNIVERSITY

the context of rapidly evolving digital technologies.

HOLY ANGEL UNIVERSITY

other technological advancements on taxpayers' adherence to regulations and requirements.

HOLY ANGEL UNIVERSITY

streamlining processes and reducing paperwork.

HOLY ANGEL UNIVERSITY

micro-enterprises in Angeles City.

 To describe the tax filing method used by microenterprises in Angeles City.

HOLY ANGEL UNIVERSITY

address these questions:

1. How do Microenterprises in Angeles City describe their tax filing method?

2. How does technology influence tax compliance, specifically in terms of:

2.2 Computer Literacy and Advantages

2.3 Security Risks

SCOPE AND LIMITATIONS

influence on tax compliance.

enterprises as taxpayers in Angeles City

SIGNIFICANCE OF THE STUDY

beneficiaries of this study will be as follows:

HOLY ANGEL UNIVERSITY

related topics and further advance knowledge in this field.

REVIEW OF RELATED LITERATURE

HOLY ANGEL UNIVERSITY

can take the appropriate safety measures.

E-Filing Tax Compliance

HOLY ANGEL UNIVERSITY

Subsequently, referring to Dwitrayan's research,

utilize the e-Filing system.

among SMEs in Kitui County.

HOLY ANGEL UNIVERSITY

Computer Literacy and Advantages

Micro-Enterprises taxpayers fulfill or carry out their tax obligations.

efficient and effective way.

HOLY ANGEL UNIVERSITY

awareness of Batangas City's Micro-Enterprise owners.

HOLY ANGEL UNIVERSITY

of tax compliance behavior among micro-enterprises in Angeles City.

level of tax compliance among micro-enterprises in Angeles City.

HOLY ANGEL UNIVERSITY

between said variables (Meita and Malau, 2023).

HOLY ANGEL UNIVERSITY

Sampling and Setting

Angeles City, either manually or utilizing e-filing for tax compliance.

curacy and relevance of the sample size calculation.

method in terms of tax compliance among the respondents in Angeles City.

HOLY ANGEL UNIVERSITY

printed questionnaires and

businesses within accessible areas of the city.

HOLY ANGEL UNIVERSITY