Tax compliance among small and medium enterprises (SMEs) remains a critical concern for governments, particularly in developing economies where informal practices and limited awareness often hinder effective tax administration. This study examines the role of digitalization, tax awareness, and institutional support in influencing tax compliance behavior among SMEs. The research adopts a quantitative approach, collecting primary data from SME owners, employees, and government officials using a structured questionnaire. The study employs statistical techniques, including descriptive analysis and Structural Equation Modeling (SEM), to evaluate the relationships among key variables. The findings reveal that digitalization significantly enhances tax compliance by simplifying procedures, improving transparency, and reducing errors in tax filing. Tax awareness is found to positively influence compliance behavior, as informed taxpayers are more likely to fulfill their obligations accurately and timely. Additionally, institutional support, including government assistance, training, and policy facilitation, plays a crucial role in strengthening compliance levels. The study contributes to the existing literature by integrating technological, behavioral, and institutional perspectives into a unified framework. It also provides practical insights for policymakers to design effective strategies that promote voluntary tax compliance among SMEs. Overall, the research highlights the importance of a holistic approach combining digital tools, awareness initiatives, and institutional support to improve tax compliance efficiency.
Keywords: Tax Compliance, SMEs, Digitalization, E-Governance, Tax Awareness, Institutional Support, Structural Equation Modeling, Tax Administration.
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