Measures of Tax Compliance among Small and Medium Enterprises in Tagum City: an Exploratory Factor Analysis

The study's general objective was to develop tax compliance domains among Small and Medium Enterprises (SMEs) in Tagum City. The study used a non-experimental quantitative research design employing exploratory factor analysis. The study's respondents, randomly chosen from a total of one hundred fifty (150) owners, managers, bookkeepers, accountants, and other personnel in charge of the company's tax. The researcher constructed the contextualized instrument integrating the measures affecting tax compliance adopted from various sources and literature. Frequency, hierarchical clustering analysis ward method, factor analysis, measures of sampling adequacy and sphericity, and factor rotation method were the statistical tools used for data treatment. Data gathered were analyzed first with hierarchical cluster analysis ward method to group significant items, and later the clustered items were factor analyzed to get the domains of tax compliance. The findings revealed that there were a total of four measures that influence tax compliance among SMEs in Tagum City. For both cluster 1 were perception of equity and fairness and tax psychological cost; while for cluster 2 (knowledge of current tax policies/tax rates; and quality of tax officers' service).