| Summary: | As a profit organization, Small and Medium Enterprise faced several tax rules such as income tax and Government Service Tax (GST). It becomes a problem when most of SME in Indonesia don�t have good accounting records so they don�t know how much profit they had or how much goods they sold. Lignier (2009) showed that most of small business only kept their accounting records to pay tax obligations. So it can be concluded that tax regulation can give managerial benefit by pushing small business owner to keep their transaction records. Good accounting records refers to better decision making process on their management.
Perception about managerial benefit influenced by personal characteristic of SME owner such as level of education, business experience and knowledge of accounting (Lignier, 2009). Understanding the managerial benefit can raise intention of SME owner to obey tax rules and lead them to tax compliance action.
The purpose of this research is to discover factors that influence perception of SME owner about managerial benefit. Independent variables used in this research is personal characteristics of SME owner including level of education, business experience and knowledge of accounting
This research conducted using primary data from SME owner in Yogyakarta City and analyzed using Structural Equation Modelling (SEM). From this research, it can be concluded that level of education, business experience and knowledge of accounting have positive impact on perception of managerial benefit.
Keywords: tax, tax compliance, small and medium enterprise (SME), managerial benefit, business experience, knowledge of accounting
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