THE SME PERCEPTION TOWARDS THE ACCOUNTING STANDARD WITHOUT ACCOUNTABILITY (SAK-ETAP) AND SELF ASSESSMENT SYSTEM FOR INCREASING VOLUNTARY TAX COMPLIANCE Putri Wulanditya putri@perbanas.ac.id Supriyati supriyati@perbanas.ac.id STIE Perbanas Surabaya Abstract Small and medium enterprises (SMEs) are the important factor for increasing the country economic growth. Since the accounting standard of financial equity without public accountability (SAK- ETAP) has been adopted per January 2010, it is really challenging for the SMEs in their businesses. This study tries to test empirically the effect of internal and external factors on the SMEs’ understanding towards SAK-ETAP. Beside, this study also tests the perception difference between the SMEs. Finally, it also test the effect of the SMEs understanding towards SAK-ETAP on tax compliance with the self assessment as the intervening variable. This study uses primary data in which the data collection was done using questionnaires distributed to 130 respondents of SMEs in Sidoarjo and Surabaya cities. The test analysis was done by means of crosstab, independent sample test, and regression. It shows the personal factors have significant effect on the SMEs understanding towards SAK-ETAP. These factors are education, types of their businesses, and the number of human resources. Among the findings, it was also found that the different perception is due to the incomprehensive understanding towards the regulation. Thus, the understanding of SAK-ETAP has no effect yet on the tax compliance. This is due to their habit of using the third party for making financial report and tax compliance as well as the feeling that the tax compliance is considered coercive. Key words: Understanding of SAK-ETAP, Self Assessment System, tax compliance I. INTRODUCTION So far, the development of small and medium enterprises (SMEs) has increased more and more. These SMEs have been considered an important part in economic growth in Indonesia. In connection with such a phenomenon, Jan Hoesada (2011) stated that the number of SMEs in Indonesia is 51.2 million units which is 99% of the existing entities, and in 2010 showed 95% of units are micro enterprises. The contribution of SMEs to the GDP in 2009 totaled Rp. 2360 trillion or 53% of GDP. MSMEs absorb the 87.5 million people or 98% of the whole workforce (124 million people). The Indonesian government has not yet set up specifically SMEs obligation to prepare financial statements. However, according to Law Decree NO.1 1995 on Limited Liability Company, indirectly, it has hinted through Article 56 which reads such as "within 5 months after the company closes the financial year, the directors draw up an annual report which is then submitted to the General Meeting of Shareholders (AGM)". For that reason, for a company