Tax knowledge, bookkeeping practices, and financial performance of micro-enterprises: Basis for an enhanced tax compliance framework

International Journal of Research Studies in Management
CollabWritive Special Issue
2025 Volume 13 Issue 5

Available Online: 13 June 2025

Author/s:

Cadiao, Mark Alex B.
Graduate School, Lyceum of the Philippines University – Batangas, Philippines

Abstract:

The study determined the relationship between tax knowledge, bookkeeping practices and financial performance of micro-enterprises in the city of Calamba, Laguna. The study utilized the quantitative method of research and utilized the Shapiro-Wilk Test and Spearman rho using the SPSS version 28 to assess the objectives. The data were collected from three hundred ninety-nine (399) enterprises that could be sole proprietorship, partnership, corporation or cooperatives locally registered in the municipality of Calamba, Laguna with net assets not exceeding three million pesos (P3,000,000) and with employees not exceeding ten (10). The results showed a highly significant relationship between tax knowledge and financial performance, and bookkeeping practices and financial performance that implies a higher-level tax knowledge leads to a timely and accurate tax compliance preventing penalties and fines from being incurred. Moreover, a well-designed bookkeeping practices promotes an accurate and complete financial record enhancing the confidence in the financial statements and all have an effect to the overall financial performance. The framework developed for this study aimed to enhance the level of tax knowledge and bookkeeping practices of micro-enterprises to ensure better and timely tax compliance while providing accurate and complete financial records ready for any potential audit causing the prevention of incurring penalties and fines from incorrect and late filing, thereby, improving the overall enterprises’ financial performance.

Keywords: tax knowledge, bookkeeping practices, financial performance, tax laws and regulations, tax compliance

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DOI: https://doi.org/10.5861/ijrsm.2025.25068

Cite this article:
Cadiao, M. A. B. (2025). Tax knowledge, bookkeeping practices, and financial performance of micro-enterprises: Basis for an enhanced tax compliance framework. International Journal of Research Studies in Management, 13(5), 181-190. https://doi.org/10.5861/ijrsm.2025.25068