Digital literacy, social media exposure, and tax compliance behavior in SMEs: The moderating role of tax evasion justification and implications for SDG 8, SDG 9, and SDG 16

Vollständiger Abstract

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Background Digital tax systems have been promoted to improve tax compliance by increasing efficiency, transparency, and accessibility. However, compliance behavior among small and medium-sized enterprises (SMEs) is not determined solely by the availability of digital systems. Individual digital capability, exposure to tax-related information in digital environments, and psychological factors may also shape taxpayers’ willingness to comply. Objective This study examines the effects of digital literacy and social media exposure on tax compliance behavior among SMEs, with tax evasion justification as a moderating variable. Methods A quantitative cross-sectional survey was conducted with 464 SME owners in Indonesia. Data were analyzed using PLS-SEM. Results Digital literacy and social media exposure both positively influence tax compliance behavior, with tax evasion justification significantly weakening both relationships. Conclusions Tax compliance behavior in SMEs is shaped by the interaction of individual digital capability, social media exposure, and moral reasoning. The findings carry implications for sustainable digital tax governance, particularly in the context of SDG 8 (inclusive economic growth), SDG 9 (digital infrastructure), and SDG 16 (accountable institutions), by identifying behavioral barriers that limit the effectiveness of digital tax systems.