Tax Compliance in Abra: Basis for Operations Strategy

Abstract

The study sought to analyze the compliance practices of microenterprises and small businesses in the province of Abra and determine how such practices may inform and guide the operational strategies of the BIR.

This study followed a method of quantitative and utilized a descriptive- correlational research design. The 152 microenterprises and small business owners registered taxpayers in Bucay, Abra served as the respondents of this study for calendar year 2025 – 2026.

The questionnaire consisted of four parts: the profile of the respondents, tax compliance indicators covering filing, payment, accuracy and truthful reporting, recordkeeping and documentation, and responsiveness to notices and audit request, degree of seriousness of the challenges covering filing, payment, accuracy and truthful reporting, recordkeeping and documentation, and responsiveness to notices and audit request, and open-ended questions on challenges and suggestions to improve the BIR tax compliance and services. Each close-ended item was rated on a four-point Likert frequency scale, with higher scores indicating greater compliance or stronger agreement with BIR initiatives.

The level of compliance of taxpayers was “very high” in terms of filing, payment, accuracy of reporting and responsiveness to notices and “high compliance” in recordkeeping and documentation. These challenges indicated a need for clearer and simplification of guidelines, improved taxpayer education, and enhanced support mechanisms to facilitate compliance.

The result suggested that compliance is more strongly influenced by educational attainment and financial capacity rather than basic demographic characteristics or business type. Both year of operation and nature of business showed no statistically significant differences across all compliance dimensions. In contrast, annual gross sales revealed significant differences in several compliance areas, particularly in accuracy and truthfulness, recordkeeping and documentation, responsiveness to notices and audit requests, and overall compliance.