Journal of Applied Sciences in Accounting, Finance, and Tax Vol. 4, No. 2, October 2021 e-ISSN 2655-2590 jasafint@pnb.ac.id Page | 143 http://ojs2.pnb.ac.id/index.php/JASAFINT The Effect of Government-Borne Final Income Tax Incentives on the Compliance of MSMEs Taxpayers during the Covid-19 Pandemic in Badung Regency N M Ayu Sumia Dewi 1) , I W Karmana 2) , and I W Purwanta Suta 3) Accounting Department, Politeknik Negeri Bali Jalan Kampus Bukit Jimbaran, Kuta Selatan, Badung, Bali – 80364 E-mail to: 1) ayusumia.dewi@gmail.com 2) karmana_wayan@pnb.ac.id 3) purwanta@pnb.ac.id Abstract: The Covid-19 pandemic has had an impact on the decline in MSME income. Final income tax incentives borne by the government is one of the government's efforts in the field of taxation. This study aims to determine the effect and magnitude of the effect of the Government's Final Income Tax Incentive on MSME taxpayer compliance during the Covid-19 pandemic in Badung Regency. The questionnaire was used as a data collection tool and the sample used was 95 corporate MSME taxpayers. The focus of this study is the final income tax incentives borne by the government that will apply in 2020 as regulated in the Minister of Finance Regulation starting from PMK 44/2020, PMK 86/2020 to PMK 110/2020 and undergoing several changes and time extensions until PMK 86/2021 which is valid until the end of 2021. The conclusions of this study are (1) The final income tax incentives borne by the government have a positive and significant effect on MSME taxpayer compliance; (2) The final income tax incentive borne by the government has an effect of 23.9% on MSME taxpayer compliance. Keywords: Final income tax incentives by the government, taxpayer compliance, MSME. 1. Introduction The Covid-19 pandemic has put pressure on the Indonesian economy and has an impact on various sectors, one of which is MSMEs. An effort to recover the economy is needed by MSMEs such as an additional stimulus in the context of national economic recovery. The government's contribution through the tax incentive policy for taxpayers affected by the Covid-19 pandemic is contained in the Minister of Finance Regulation regarding tax incentives for taxpayers affected by the 2019 coronavirus disease pandemic. Before the Covid-19 pandemic, MSMEs contributed greatly to the Indonesian economy as seen from Gross Domestic Product (GDP) which increased by 60% [1]. However, since the Covid-19 pandemic occurred in Indonesia, almost all MSMEs have experienced a decrease in sales due to the enactment of social restriction regulations to avoid crowds and impact on the ability of MSMEs to continue their business. In this situation, the government's contribution through its policies plays an important role for MSMEs [2].