Digital Tax Administration, Compliance Burden, Trust, and Fiscal Fairness: Evidence from MSME Taxpayers

Abstract

Public economics and fiscal policy increasingly examine taxation as a fiscal relationship between citizens and the state, rather than merely as a legal or administrative obligation. Within this field, digital tax administration has become central to MSME compliance because it reshapes how taxpayers report, pay, seek assistance, and evaluate fiscal institutions. However, limited evidence explains how MSME taxpayers live and interpret digital tax compliance as an experience involving burden, fear, assistance, trust, and perceived fairness. Here we show, through a descriptive phenomenological approach, that MSME taxpayers experience digital tax administration as conditional digital fiscal citizenship, where willingness to comply depends on clarity, support, and trust. Data were generated through in-depth semi-structured interviews, digital compliance diaries, field notes, and compliance journey mapping with [insert actual number] MSME taxpayers who had direct experience using digital tax services. The analysis identified five essential themes: complying without fully understanding, digitalization as invisible administrative burden, fear of sanctions and enforced compliance, the continuing need for human assistance, and conditional fiscal trust. These themes show that digital tax systems can reduce physical procedures while creating cognitive, emotional, and interpretive burdens for taxpayers with limited administrative capacity. The findings deepen understanding of digital tax reform by showing that voluntary compliance requires human-centered systems that make tax obligations understandable, fair, supportive, and institutionally trustworthy.