The objective of this study is to investigates the role of bookkeeping
capability of taxpayer in relation with the taxpayers' compliance behavior at small and
medium enterprises. These SME's actors were chosen based on their significance in
contributing to the national economy. Despite the high volume number of SME's in
Indonesia, their involvement in the tax payment compliance still show the low
percentage to total national tax revenue. As starting point, this research is intended to
identify the bookkeeping practice among small and medium enterprises. After that, this
research also try to examines some characteristics of bookkeeping such as bookkeeping
capability, compliance cost and audit exposure risk. Finally, the result of this research
wilt provide some policy recommendations regarding the contribution of SME's
taxp-Tahyee r to the regulator.
results of this study show that bookkeeping capability of SME's has significant
and relationship with the taxpayers' compliance behavior. As for compliance cost and
audit risk, both of them show negative relationship with taxpayers compliance behavior
although not significant
