Hoang Thi Hong LE, Vuong Thi Bach TUYET, Chu Thi Bich HANH, Quang Hung DO / Journal of Asian Finance, Economics and Business Vol 7 No 7 (2020) 209 – 217 209 209 Print ISSN: 2288-4637 / Online ISSN 2288-4645 doi:10.13106/jafeb.2020.vol7.no7.209 1 First Author. Senior Lecturer, Faculty of Transport Economics, University of Transport Technology, Vietnam. Email: lehth@utt.edu.vn 2 Lecturer, Faculty of Transport Economics, University of Transport Technology, Vietnam. 3 Lecturer, Faculty of Transport Economics, University of Transport Technology, Vietnam. 4 Corresponding Author. Senior Lecturer, Faculty of Information Technology, University of Transport Technology, Vietnam [Postal Address: No 54, Trieu Khuc, Thanh Xuan Nam, Hanoi 100000, Vietnam] Email: hungdq@utt.edu.vn © Copyright: The Author(s) This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://Creativecommons.org/licenses/by-nc/4.0/) which permits unrestricted noncommercial use, distribution, and reproduction in any medium, provided the original work is properly cited. Factors Afecting Tax Compliance among Small- and Medium-sized Enterprises: Evidence from Vietnam Hoang Thi Hong LE 1 , Vuong Thi Bach TUYET 2 , Chu Thi Bich HANH 3 , Quang Hung DO 4 Received: April 19, 2020 Revised: May 03, 2020 Accepted: June 07, 2020 Abstract Taxes are levied in almost every country, primarily to raise revenue for government expenditures. This study explores factors infuencing tax compliance of small- and medium-sized enterprises (SMEs) in Vietnam. Data from 376 SMEs, who are business taxpayers, were collected through a researcher–administered questionnaire survey method. The results indicate that six groups of factors have signifcant impacts on tax compliance among Vietnamese SMEs. These groups include: Business characteristics (BC), Characteristics of accounting practices within organization (AP), Awareness of tax obligations (TO), Tax policy (TP), View on tax compliance (TC), and Probability of tax examination on taxpayer compliance (TE). Multivariate analysis was adopted; Cronbach’s alpha coefcients were calculated, then, Exploratory Factor Analysis (EFA) was used. The fndings show that, among these six factors, the most infuential is Characteristics of accounting practices (AP). Thus, it is recommended that tax agencies should help SMEs improve their accounting skills and increase their knowledge by organizing training workshops and short courses on taxation. SMEs also need to have an adequate accounting system in accordance with principles and standards prescribed by the Tax Law. It is expected that this study can provide important insights and understandings to policy-makers, practitioners, academicians and other regulatory authorities in tax policy formulations. Keywords: Tax Compliance, Tax Obligations, Tax Policy, Accounting Practices, SMEs, Vietnam JEL Classifcation Code: G28, G41, K22 1. Introduction Small- and medium-sized enterprises (SMEs) have been a noteworthy driver of economic development, being vital to most economies across the world, particularly in developing and emerging countries (Gherghina, Botezatu, Hosszu, & Simionescu, 2020). Many external and internal factors infuence the establishment, operation, growth and development of SMEs. The developed countries put SMEs in the focus of their economic strategies and programs with specific macroeconomic policies measures, such as targeted fiscal policy to SMEs, tax exemptions and special taxation schemes that directly affect the reduction of operating costs, improve liquidity and competitiveness of SMEs (Salehi, Khazaei, & Tarighi, 2019). In Vietnam, SMEs serve as a vehicle to create jobs for local communities. The government of Vietnam has identified and prioritized the development of SMEs as one of its strategic objectives. Despite the importance of these businesses for the country and regions, these businesses still face many challenges. One of the most onerous and time-consuming challenges is ensuring tax compliance. Tax compliance is defined as the preparation, submission and payment of taxes due within the specified time periods (Naicker & Rajaram, 2019; H. H. Nguyen, 2019). Tax compliance and factors affecting tax compliance have been getting much attention in Vietnam. (Hoa, Lien, & Tuan, 2019; Nguyen, Pham, Le, Truong, & Tran, 2020). In general, tax compliance studies are based on three theoretical models: