3rd Tax Compliance of Freelance Workers in Lipa City

Tax Compliance of Freelance Workers in Lipa City
A Thesis
Presented to the Faculty of
College of Accountancy, Business and Economics
Batangas State University
Lipa City
In Partial Fulfillment of the Requirements for the Degree

Bachelor of Science in Management Accounting
By:
Decena, Kristel Joy P.
Jaen, Krystel Mae S.
Ramirez, Maria Cristina L.
March 2022
APPROVAL SHEET
This research entitled TAX COMPLIANCE OF FREELANCE WORKERS
IN LIPA CITY prepared and submitted Kristel Joy P. Decena, Krystel Mae S.
Jaen, and Maria Cristrina L. Ramirez in partial fulfilment of the requirements for
the degree Bachelor of Science in Management Accounting has been
examined and recommended for oral examination.
REY ANTHONY N. ABING, MBA

Adviser
Approved by the Committee on Oral Examination with the grade of_

.
PANEL OF EXAMINERS
MONETTE SOQUIAT Ph.D.

Chairman
NELSIE MALIBIRAN, MBA RONIE A. MENDOZA, MS MATH

Member Member
Accepted and approved in partial fulfilment of the requirements for the

degree of Bachelor of Science in Management Accounting.
Date MONETTE SOQUIAT Ph.D.

College Dean
ii
ACKNOWLEDGEMENT
The researchers are profoundly beholden to the compassionate people
who really gave their support, advised and shared what they could afford to offer
in the completion of this study. They would like to recognize the involvement and
support of the following:
To Batangas State University, for giving the researchers the opportunity to
learn through the quality education it provides.
To their adviser, Mr. Rey Anthony N. Abing, for giving fruitful ideas, advice
and support that lead the researcher to work hard for this study and also his full
support being their adviser, providing supervision, guidance and patience in the
study that enabled the researchers to come up with a through and accurate
study.
To the panel of examiners, Dr. Monette Soquiat, Ms. Nelsie Malibiran and
Mr. Ronie A. Mendoza for the time they spent in checking this work and giving
their suggestions to further improve this study.
To the experts, Mr. Arnold Malaluan and Ms. Janet Cometa, for sharing
their expertise on the field of taxation and giving us advice to help us in preparing
for the questionnaire.
To Mr. Perry Taborda, for helping the researchers in the statistics of this
study.
To the freelance workers in Lipa City, for providing the data and for
serving as the subject of the study.

To all members of the group who stood still until the end and exerted their
prodigious time, effort and strength to accomplish this task.
To their beloved parents, who bestowed them the love, kindness, unfailing
support and courage in every step in their lives, and who patiently reminded and
guided them to the right things for their benefits.
Above all, to the God Almighty, who made everything possible and who
provide them strength of not giving up. All honor, gratitude and glory go back to
Him.
With much gratitude from all the researchers’ heart!
Kristel Joy
Krystel Mae
Maria Cristina
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TABLE OF CONTENTS
Page
TITLE PAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
APPROVAL SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
ACKNOWLEDGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
LIST OF TABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
. LIST OF FIGURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
. ABSTRACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
CHAPTER
I. THE PROBLEM
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statement of the Problem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Theoretical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conceptual Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Research Hypothesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Scope and Limitation of the Study. . . . . . . . . . . . . . . . . . . . . . . . 11
Definition of Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
II. REVIEW OF RELATED LITERATURE

Conceptual Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Research Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Other Literature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Synthesis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
III. METHODOLOGY
Research Design. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Sampling Design. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Respondents of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Data Gathering Intrument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Data Gathering Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Statistical Treatment of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
IV. PRESENTATION, ANALYSIS AND CONCLUSION OF DATA

Demographic Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Tax Compliance of the Respondents. . . . . . . . . . . . . . . . . . . . . . 51
Significant Difference on Tax Compliance of the Respondents
when Grouped According to Profile Variables. . . . . . . . . . . . . . . 31
Proposed Extension Program. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
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V. SUMMARY, FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
BIBLIOGRAPHY
APPENDICES
A. Survey Questionnaire
CURRICULUM VITAE
6
LIST OF TABLES
Table Title Page

No.
4.1.1 Distribution of the Respondents in terms of their Age. . . . . . . . . . . 45
4.1.2 Distribution of the Respondents in terms of their Sex. . . . . . . . . . . 47
4.1.3 Distribution of the Respondents in terms of Type of Work. . . . . . . 48
4.1.4 Distribution of the Respondents in terms of Number of Years as
Freelance Worker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.2.1 Assessment on Tax Compliance of Freelance Workers in terms
of Tax Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
of Tax Awareness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
of Tax Morale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
of Tax Penalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.2.5 Summary of Weighted Mean of Different Variables . . . . . . . . . . . . 60
4.3.1 Significant Difference on the Test of Difference on Assessed Tax
Compliance of the Respondents as to Tax Knowledge When
Grouped According to their Profile. . . . . . . . . . . . . . . . . . . . . . . . . 61
Compliance of the Respondents as to Tax Awareness When
Grouped According to their Profile. . . . . . . . . . . . . . . . . . . . . . . . . 63
Compliance of the Respondents as to Tax Morale When Grouped
According to their Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.3.4 Significant Difference on Assessed Tax Compliance of the
Respondents as to Tax Penalty When Grouped According to their
Profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
.
4.3.5 Summary of Tax Compliance of the Respondents with Regards to 70
vii
Variables when Grouped According to their Profile
4 Proposed Extension Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8
88
LIST OF FIGURES
Figure Title Page
Figure 1 Theory of Planned Behavior. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 2 Conceptual Paradigm of the Study. . . . . . . . . . . . . . . . . . . . . . 8
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ABSTRACT
This study was designed to determine the tax compliance of freelance
workers in Lipa City. It assessed the profile of the respondents in terms of age,
sex, type of work and years as freelance worker. This study discussed if there is
any significant difference between the tax compliance when grouped according
to respondents’ profile.
Descriptive type of research method was utilized in the study. The primary
data were gathered from several freelance workers in Lipa City. The secondary
data come from the books, journals, internet, and other related studies. Using
the simple random sampling method, the researchers had 100 respondents
which provided the data needed. The researchers used a scaled questionnaire.
This utilized as a major instrument in gathering adequate and necessary data.
The questionnaire had two parts. The first part is the respondent’s profile like
age, sex, type of work and years as freelance worker and the second part is
about the tax compliance. The statistical tools used were percentage, weighted
mean and anova.
The result showed that mostly of the respondents are under the age of 18-
35 and is male. Most of them are in the field of customer service for less than 1
year in service.
Meanwhile, the variables such as tax knowledge, tax awareness, tax
morale and tax penalty were used to assess tax compliance of the respondents.
All the items in each variable were verbally interpreted as used quite a bit.
1
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On the other hand, the study revealed that there is no significant
difference on such tax compliance when the respondents are grouped based on
their age, sex, type of work and years as freelance worker except for the tax
knowledge in which there is a significant difference when grouped according to
sex.
The researchers suggest establishing an extension program about a
webinar regarding Philippine taxation, educating the workers about it, and
spending time to study and understand what taxation is all about.
Further, the researchers also recommend that future researchers may
conduct a similar study or related to the present study in business and
management area. They may use this study as a reference.
KEY WORDS: Tax Knowledge, Freelance Workers, Tax Knowledge, Tax
Awareness, Tax Morale, Tax Penalty
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Chapter I
THE PROBLEM
This chapter consists of a brief discussion of the problem and its
background, theoretical and conceptual framework, research hypothesis,
significance of the study, scope and limitation, and definition of terms.
Introduction
At the present time, the number of people who are entering the field of
freelancing has been increasing. Coronavirus pandemic has caused a great
damage to the global market that left people unemployed, but this pandemic
opened the freelance market. According to Maurer’s poll (2020), 34% freelancers
started their freelance jobs on March when the pandemic hit. Although the
income in freelancing is not fixed, they are still obliged to pay freelance tax. The
question is, are freelance workers a tax compliant?
Freelance workers are self-employed people who are not generally
dependent on a single employer on a long-term basis (Investopedia, 2020).
Freelance workers are typically considered independent contractors and can
work on contractual full-time or as a second job to complement full-time jobs as
time allows. A freelance worker typically works in the artistic, professional, or
service industries, such as filmmaking, painting, architecture, publishing,
copywriting, media, marketing, music, acting, journalism, etc. A web designer or
software developer who performs one-time work with a client and then goes on
to another client is an example of a freelance job.
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Tax is a vital tool for a country's economic development and long-term
sustainability. Taxation and individual tax compliance study is beneficial to
citizens, policymakers, academics, and the government on economic, political,
and social levels. A tax is a mandatory levy imposed by a constituted authority on
an individual's income or the profits of a business company. It is a method for
citizens to contribute to and supplement the expense of governance (Adekoya,
Olaoye, & Lawal, 2020). Tax is the connection between people and the
government. It is a give and take relationship wherein people contribute a portion
of their income to the government in exchange of projects like building of
infrastructure and/or financial support to their people.
Workers who are considered self-employed must pay the self-employment
tax. Sole proprietors, freelancers, and independent contractors who operate a
trade or business fall under this category. The Internal Revenue Service may
regard a member of a partnership who engages in a trade or company to be
self- employed. Self-employed people must pay self-employment tax in order to
get Social Security benefits after they retire (Investopedia, 2020). Every worker
is subject to the same tax rules, and they are compelled to pay taxes for
everyone's benefit. Governments perform their responsibilities for the benefit of
all citizens in exchange for their contribution to the country's economy.
As freelance working field increases, there is also a possibility that the
country’s economy will grow. With this, researchers conducted this study to
provide a clearer and deeper understanding about tax compliance to help
freelance workers. Many freelance workers may have a hard time to understand
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what tax is and how to comply with tax laws but after this study, they will be
informed on what they have to do to properly handle and manage their tax
compliance.
Background of the Study
Entering the field of freelancing doesn’t exempt you in paying taxes.
In fact, in comparison to workers, freelancers have complete discretion over
their tax circumstances. However, there is a cost to freedom. Freelancers are
subject to a higher tax burden and are responsible for more record-keeping than
employees (Perez, 2021).
Freelance taxes, like employee taxes, are mandated by statute and
contribute to local and national growth (Valdez, 2020). However, according to
FullSuite Team, most freelancers have been enjoying a tax-free income while the
employed Filipino has no option but to pay taxes, because they are unaware that
they are obligated to pay taxes, or because they are aware but want to avoid
doing so. This will affect not only the government sector but also everyone. We
are all aware that the government funding comes from the taxes paid by
businessmen, and workers. There will be no budget for education, public health,
infrastructure, and other projects if there will be no taxes paid.
According to an online survey conducted by PaYoneer blog to freelancers,
32% of the respondents said that demand for freelance services from companies
have decreased while 23% shared that their businesses were not affected
and
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that 17% saw an increase in the demand for their services. Due to this, there
were more windows of opportunities for current and prospective freelancers.
Finding a calling especially during the pandemic has always been an
impending feat for everyone who is trying to build their career. This goes from
sending out resumes to established companies to working on various projects to
gain more experience. Despite this norm, some would opt to choose the path of
self-employment or freelancing in order to have more control over their craft.
With an ever-changing atmosphere in the job market, freelance work can be
very broad and diverse. Anyone can start as a freelancer through practice,
training, and even support from friends, family, and communities. It is also
important to be ready to try new and learn new things to improve one’s craft.
However, one must be prepared to take on risks and challenges that come with
one’s passion. Lipa City is known as one of the progressive and fast emerging
City, reason why it is easy for the citizen here to make their own career in
business world.
Therefore, the purpose of this study is to determine the compliance of
freelance workers in Lipa City about tax. The study is timely since the rate of
people entering in the field of freelancing is increasing. In this study, the
researchers want to develop the importance of the tax compliance to freelance
workers with the result of the study.
Statement of the Problem
This study aimed to determine the tax compliance of freelance workers in
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Lipa City.
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Specifically, the study desired to answer the following questions:
1. What are the profiles of the respondents in terms of:
1.1. age;
1.2. sex;
1.3. type of work; and
1.4. years as freelance worker
2. How do respondents determine their compliance in terms of:
2.1. tax knowledge;
2.2. tax awareness;
2.3. tax morale; and
2.4. tax penalty?
3. Is there any significant difference on the tax compliance of the respondents
when grouped according to their profile variables?
4. Based on the result, what course of action may be proposed by
the researchers?
Theoretical Framework
Figure 1. Theory of Planned Behavior (Azmil et al., 2020)
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The researchers used the theory from the study about Tax Compliance
Motives among Grab Car Drivers in Malaysia (2020) entitled Theory of Planned
Behavior by to explain the problem under study. The framework consists of four
variables, tax knowledge, tax awareness, tax morale, and tax penalty.
According to the study, tax knowledge can determine the tax compliance
behavior of an individual. It is said that having such knowledge will greatly affect
their tax compliance as they would understand how tax system works and the
requirements on filling the tax form. As stated in the study of Saad (2014), the
absence of tax knowledge may lead to noncompliance behavior among
taxpayers, either intentionally or unintentionally.
Tax awareness refers to knowing what tax laws and principles apply to
you or could apply to you (Vittoratos, 2016). Tax awareness encompasses a
wide variety of topics, from the mechanics of filing a tax return to an
understanding of the relationship between taxes and government spending. It
also entails understanding of various tax forms, how they are paid, taxpayer
rights, and how to handle the appeals process (Mascagni, 2020).
Tax enforcement, as well as transparency and responsibility, are all
hampered by a lack of taxpayer’s awareness. There is now solid proof that low
levels of tax compliance are caused by a lack of taxpayer awareness. When
taxpayers don't understand the tax code, they're more likely to get perplexed,
waste more time trying to figure out their responsibilities, and make errors that
might result in penalties. The costs of enforcement (the emotional, time, and
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financial costs that taxpayers incur when they try to learn and comply with the
system) have been seen to be substantial and regressive. The strain is borne
mostly by small taxpayers. Enforcement expenses may also result in taxpayers
paying more tax than they should. This leads to feelings of resentment and
unfairness, which has a negative impact on enforcement. Taxpayers could be
unable to participate in tax discussions due to a lack of expertise. This reduces
the importance of taxes in enhancing transparency and governance. Taxpayers
would be less vulnerable to abuse and inappropriate behavior by tax authorities
if they learned more about their tax commitments, according to forthcoming data
from Ghana and Sierra Leone. Only the most basic facets of taxpayer awareness
may help to minimize corruption, build confidence, and increase transparency
(Mascagni, 2020).
OECD (2018) defines tax morale as taxpayer’s perceptions and attitudes
towards paying and evading taxes. Our work on tax morale outlines several
factors that may influence people’s willingness to pay taxes and highlights
several policy considerations. This is also defined as the totality of non-pecuniary
motivations and factors for tax compliance which fall outside the expected utility
maximization by Luttmer and Singhal (2014).
According to the study of Doran (2019), a penalty promotes compliance.
Tax penalties appear to be justified based on what encourages people to comply
with their tax responsibilities. In most nations, tax penalties, tax audits, and tax
rates are employed to deter noncompliance by taxpayers. These three threats of
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penalty may persuade people to pay their taxes. Most previous research
has
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found a favorable relationship between audit probability and compliance (Azmil et
al., 2020).
Conceptual Framework
Concepts in relation to the study at hand were considered to give direction
to the researcher. This provides a clear picture on how the study was
undertaken and shows the framework that served as the backbone of the study.
Input Process Output
Profile of the Development of a

Respondents: Survey
Questionnaire
● Age
● Sex Extension
Distribution of
● Type of work Program about a
Survey
Questionnaires Webinar
● Years as Regarding Tax
freelance worker System
Tax Literacy Data analysis Knowledge for
● Tax knowledge Freelance
Workers
● Tax awareness Presentation
● Tax Morale and
Interpretation of
● Tax Penalty Data Treated
Statistically
Figure 2. Conceptual Paradigm of the Study
Figure 2 presents the conceptual framework of the study of Tax
Compliance of Freelance Workers in Lipa City. First, the researchers determined
the respondent’s profile such as age, sex, type of work, and years as freelance
worker. It also determined the tax compliance of freelance workers using the
“Theory of Planned Behavior” developed by Azmil, et al. in terms of
tax
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knowledge, tax awareness, tax morale, and tax penalty. The profile variables and
tax compliance were included as the inputs since the study wanted to
determine if there is a significant difference on the compliance of the freelance
workers with regards to tax when grouped according to their profile variables.
The second part was the process through the use of the survey
questionnaire to gather the needed and relevant information for the study. By
using the survey questionnaire, the researchers can determine the tax
compliance of the respondents. Finally, the output of the study derived from the
information gathered after a thorough analysis of the results was an
extension program regarding the webinar for freelance workers about tax
compliance.
Research Hypothesis
To determine the tax compliance of freelance workers, the following
hypothesis was tested.
There is no significant difference on the compliance of the freelance
workers with regards to tax when grouped according to their profile variables.
Significance of the Study
The focus of this study was to determine tax literacy of the freelance
workers in Lipa City. The researchers believed that this will be beneficial to the
following:
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To freelance workers, this study will provide them the information about
tax. This will help the taxpayers enlighten about the importance of tax
compliance.
To Bureau of Internal Revenue, the study will provide them the
information about the tax compliance of freelance workers, and this study also
help them to formulate a strategy to mandate and monitor all the tax payers fairly
on their responsibilities paying their taxes.
To Batangas State University, this study would serve as a reference
material to other students who will conduct research with a similar topic. Through
this study, the school may conduct seminars to the professors and students
about tax.
To the College of Accountancy, Business and Economics, this study
will serve as a reference material in future related studies. Through this study,
CABE department may provide resources to the students for them to know the
importance of tax compliance while they’re still studying.
To the researchers, this study will serve as reference for them in
imparting the knowledge about the tax compliance. The information conducted
by the researcher will help them to understand the responsibilities and
importance of paying taxes.
To the future researchers, this study will serve as basis and guide that
could give them relevant information in relation to their study. This will help them
to be aware and to improve their study with the existing information.
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Scope and Limitation of the Study
The study primarily focused on tax compliance of freelance workers here
in Lipa City. The tax compliance is determined through the use of questionnaire
as the primary tool in collecting necessary data and information. The study only
covered profile such as age, sex, type of work, and years as freelance
worker. Tax compliance of the respondents were measured using “Theory of
Planned Behavior” by Azmil, et al. in terms of tax knowledge, tax awareness, tax
morale, and tax penalty. The freelance workers of Lipa City were chosen as the
respondents of the researchers because it was proven that the rate of freelance
workers is increasing and since Lipa City is one of the developing cities outside
Manila that has a booming freelance job.
This study was only limited on the assessment of the respondents who
were working in Lipa and had nothing to do with other jobs and industries. The
number of respondents was also limited to 100 because most of the freelance
workers were not regularly seen in one place for they were working in the field
looking for prospects.
Definition of Terms
For the purpose of clarification, the important terms used in this
study have been defined.
The following terms are:
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Tax Compliance. This refers to taxpayers have fulfilled their legal
obligations under the law, which include submitting all tax returns and
paying all tax
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payments (Ndlovu & Phiri, 2020). In this study, tax compliance is used as the
main topic of the research. The freelance workers are being assessed by
determining if they are complying with tax.
Freelance Workers. This refers to self-employed individual that does not have
their taxes deducted from the company in whom they conduct business. As a
result, the freelance worker is solely responsible for paying income taxes
(Downey, 2020). In this study, it is the respondents who worked from different
industries in Lipa City that is involved in providing services.
Tax Awareness. This refers to the concept of being informed of what tax
laws and principles apply to you or could apply to you ( Vittoratos, 2016). In this
study, tax awareness is one of the terms used as part of the assessment of tax
literacy under statement of the problem as one of the variables.
Tax Knowledge. This refers to grasp of the most important tax policy principles
used in a country It's a crucial component of a voluntary compliance tax system,
especially when it comes to calculating an appropriate tax liability. (Newman et
al., 2018). In this study, tax knowledge is one of the variables under the
theoretical framework of the research. It is used to help researchers to assess
the freelance workers.
Tax Morale. This refers to the inherent drive to pay taxes resulting from a moral
obligation to pay taxes or the notion that paying taxes contributes to society
(Armitage & Chaunga, 2014). In this study, tax morale is used as one of the
variables to assess the freelance workers in accordance to their tax compliance.
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Tax Penalty. This refers to an economic approach for preventing non-tax
compliance and encouraging tax compliance among the general populace in a
country (Azmi et al., 2020). It is used as one of the variables to assess the
freelance workers in accordance to their tax compliance.
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Chapter II
REVIEW OF RELATE LITERATURE
This chapter presents the related literature and studies after the thorough and in
- depth search done by the researchers. This will also present the synthesis of
the conceptual literature and related literature to fully understand the research to be
done for better comprehension of the study.
Conceptual Literature
This chapter presents necessary literature that deals with the
discussion of tax compliance challenges and the variables; tax awareness, tax
knowledge, and meaning making or informed decision making, which are
relevant to the study. The researchers gather the information from various
sources.
Tax. As for tax being the main source of income of the government,
taxation is said to be the system by which the government collect money from
people and finance such government activities with the collected money. In an
article, Taxation by Roser & Ospina (2016), tax revealed such differences from
developing countries and developed countries. Developed countries’ status today
about collection of taxes are much larger than usual and they tend to reply much
on the income taxation for their development. Developing countries, on the other
hand, tend to reply more on trade taxes rather than income taxes.
Given the current situation, the process on filing tax return is complicated
and difficult to some people, especially to self- employed individuals. It is
according to Bongat (2020), The main reasons why taxpayers are failing to
comply are difficulty in understanding the tax structure, inefficient filing process,
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not accessible online platform, and multiple tax requirements for self- employed
individuals. Also, the tax system of the Philippines ranks behind Iraq and
Afghanistan knowing that they plagued in war and political conflicts. Meaning the
Philippines is having issues with regards to tax system.
On the other hand, the pandemic had affected massively the Philippines
when it comes to the status of the economy and the financial state of the
government. Also, it lessened the economic activity far worse than anything on
record in the Philippines. According to an article from International Monetary
Fund by Gaspar, (2020), It has affected as well the Taxation of the Philippines. It
will affect first the capability of the government to support such basic needs of
the Filipinos with the use of taxes. The reason why it is relevant to the
government today. It will help the government to even out and give back the
balance to the society/economy. Thus, the progressive taxation will make an
argument between the government and the taxpayers.
Due to its importance, the development of the country relies on having
large collection of taxes from taxpayers. It is to have more government projects
and support health assistance, local services, and finance of the country.
Parallag (2020), to have focus on the respondents, the registered freelance
workers, an individual who is a self-employed professional is subject to the
income tax settlement, meaning it is a must to have tax compliance from
freelance workers. It is to support the government activities and development of
the country.
15
The relationship between the government and the taxpayer is clearly a
situation wherein when the government provide more services then taxpayers
have to pay more for them. According to an article by Perez (2021), clearly
saying that the purpose of taxation is to support government activities. Taxing
individuals is one of the few ways the government can generate the funds
needed to meet its social and civic obligations. In other words, taxpayers has
a big contribution to the government growth and the society.
Tax Compliance. According to Mama (2019), tax compliance is the
willingness or voluntary act of an individual to act in accordance to the tax law
itself without any enforcement activity. Tax compliance is an optimistic result of
individual’s decision in compliance of paying taxes to the government. Also, filing
all required tax returns at the appropriate or before deadline is one of the
definition, as well, of the tax compliance. The tax compliance of an individual may
depend on the tax system of the government and the situation they have on their
own. In accordance to the empirical findings of Freire-Serén & Panadés (2013),
tax rates reduction may cause taxpayers to become more compliant in paying
taxes. Vice versa, the high tax rates and the low income of the taxpayer makes
the tax compliance less attractive.
On the other hand, the effect of the pandemic made the Philippine
economy meets its greatest problem. The implementation of lockdown to various
cities in the Philippines affecting as well the tax compliance of the Filipinos. In an
article by Laforteza & Lapitan (2020) cited, the ECQ was implemented to help
16
minimize the spread of the COVID-19 pandemic. The ECQ, on the other
hand,
17
has had a negative effect on the Philippine tax system by prompting the
government, through its numerous agencies, to release issuance s and steps to
prolong tax deadlines and, where possible, offer tax relief. Since the Philippine
tax filing and payment system is still in the process of transitioning to a
completely electronic one, some of the measures involved in filing tax returns
and paying taxes still include filing hard copies of records and taxpayers'
physical appearance at the tax authority's offices, the Bureau of Internal
Revenue (BIR), and at the BIR's approved agent banks (AAB). The ECQ has
restricted taxpayers from leaving their homes to complete these tasks.
The increasing number of self- employed individuals during pandemic has an
effect with regards to the economic growth of the Philippines. Since there is an
increase with people who are entering freelancing, the questions that most of the
people are asking; “are they paying their taxes?” and “are they required to pay
tax?”. In an article by Zoleta (2020), the fact that the National Internal Revenue
Code does not specifically address “freelance workers” adds to the uncertainty
regarding whether freelancers can pay income tax or not. Regardless,
depending on the type of the job or company, freelancers may be categorized as
self- employed individuals or mixed-income earners.
Not just about the requirement of paying tax for freelance workers but the
effect of the tax compliance challenges are also important to consider. Their
decision about tax compliance may affect the government since self- employed
professionals are increasing. In an article, The Importance of Tax Literacy, the
fact that people are more advance in understanding tax implications, the
18
engagement of them to Government Budget updates will increase. Having low
tax awareness/literacy can lead to poor tax compliance and will damaging the
growth of the economy or the society. Vice versa, the taxpayers’ tax compliance
will be a great help in order to fight evasion and corruption, which will result in
creation of greater democracy, accountability and responsiveness.
Freelance Work. A work where there is no employer, just an individual
working for him/herself is called freelance work. People who are working for the
themselves are called “freelance workers or self-employed individuals”.
According to Bianchi (2021), there are tons of freelance works for those aspiring
individuals. One of those is the contract work wherein an individual is bind in a
contract for a period of time and consider that individual as a temporary worker
rather than a permanent employee with contract. Freelance work is being defined
as a job for your own.
The advantages of being a freelance worker and having freelance work
are clearly much better than being an employee. The freedom of having all the
free times and choosing a desire work is embedded in freelance work. In an
article from Jalan (2018), employees are being frustrated on having such
massive workloads and having no free time and enough freedom for them to
enjoy. In India, the statistics of freelance professionals are high. They have the
second highest number of freelance workers in the world. Fairly to say
that Indians are world-widely known to have much skills and knowledge
when it comes to work.
19
Due to pandemic, the Philippines’ economic activities reduces. It is
because of the hesitation to people brought by the COVID- 19. People tend to
quit their jobs and start to do freelancing since some companies are not to adapt
work-from-home (WFH) strategy. According to Abad (2020), Payoneer's
2019
Global Gig-Economy Index cited that the Philippines is ranked sixth in the world
and is the fastest-growing market for the freelancing industry, with a 35%
increase in freelancing revenue year on year. Given the fact that it is a statistic
from 2019, expect that due to the people’s demand and the pandemic situation, it
will expand further.
On the other hand, there are also implications on the side of freelance
workers. Due to clients’ vague requests, expect that the work will not be easy.
Sometimes the work will just be paid in low price because of the unsatisfactory
from the clients. Maguire (2019), freelance workers are sometimes getting no
payment and offered less than their work. They are also struggling with having
enough budget for the next project they will get but because a freelance worker
has the skills and all, it is impossible for them to get the payment they deserve,
especially to those professional freelance workers. It is also impossible for them
to not comply with paying taxes.
Freelancing became such significant career as of today because of its
flexible features. It is not just for professionals, but to those young and soon-to-
be-professional students as well. According to Goyal (2018), this generation will
20
bring more young freelance workers even though they are working in the
corporate world. The reason is, it is easy to search for a freelance work in an
21
online platform. The ease of using technology has a massive effect to the young
freelance workers. Lastly, they are also eager to have more freedom and earning
at the same time as they grow older.
A Framework for Tax Literacy
Tax Knowledge. Knowing tax law and the procedure on how to pay taxes
are part of having tax awareness. Also, it is best known as having tax knowledge
for knowing both the tax law and procedure in filing to BIR. In accordance to
Pham et al., (2020), tax knowledge is described as an understanding of both tax
law and the procedure by which taxpayers engage with tax authorities. Tax
knowledge has been identified having two elements the procedural knowledge
and the legal knowledge.
There is a difference between procedural knowledge and legal knowledge
as being the two elements of tax knowledge. According to Tallaha et al. (2014),
it was discovered that there is a distinction between procedural knowledge
and legal knowledge in tax. To best know the procedural knowledge in simple
definition, it is the knowledge of knowing procedures in filing and paying taxes.
While, legal knowledge is the understanding of the tax laws in order to determine
legalities about paying taxes.
Saad (2014), cited that the higher compliance rates will gain from tax
awareness of taxpayers. Similarly, a lack of tax knowledge about taxation can
contribute to non-compliance actions among taxpayers, whether deliberate or
unintentional. Furthermore, small business taxpayers are mostly unaware of their
22
lack of tax awareness, which may lead to unintended non-compliance. Literally
saying, without tax knowledge about taxation, it may lead to non-compliance
whether intentional or unintentional.
Freelance workers will be subject to business taxes whether they are
regularly engaged in trade, business, or the practice of their occupation. In an
article, Tax Compliance of Freelancers in the Philippines by Pagaspas, a self-
employed individual pays business tax because he or she works as a freelancer,
and it makes no difference whether or not he or she earns money after deducting
business expenses as long as you have gross receipts from your freelancing
business. Some people have the misconception that they should not have to pay
because their income is smaller than their expenses. Knowing the tax knowledge
about taxation could help freelance workers to understand the importance of
paying tax.
In procedural knowledge being one of the elements of tax knowledge, it is
important to know the procedures. According to Mateo, (2017), Filipinos are
entitled to due process in general. In tax assessment, there is also a due
process. Also, the corresponding evaluation notice must be appropriately served
and received by the taxpayer for an assessment to be legitimate in accordance
with Section 228 of the National Internal Revenue Code. Knowing this
information is part of knowing the rights of the taxpayers as well.
Tax Awareness. Tax Awareness is one of the most important factors
influencing taxpayers' willingness to comply. Aside from taxpayers’ favorable
perceptions of the tax system and tax authorities, taxpayers' voluntary
23
enforcement behavior improves. Furthermore, the tax system should be equal,
and everyone should pay their fair share to ensure long-term mutual tax
enforcement. In an article from the Department of Education in Affirming the
Importance of the Tax Reform for Acceleration and Inclusion (TRAIN) by Briones,
taxpayers all need to know and understand the fact that the main source of funds
in order to finance public goods and services is taxes. Also, the fact that the
people’s demand in public goods and services increases but also believes that
tax is a burden.
Having tax awareness is not just significant to have but also a must to
know. Being a taxpayer is somehow a requirement as well and a duty to fulfill for
the betterment of the economic state. According to Hastuti (2014), states that
taxation is likely to be a responsibility of a resident, that is why, paying the tax is
a prior investment, and any relevant details must be given honestly. Also, there’s
no excuse in not learning tax since stated as well in the study that tax
knowledge ca be learned by self-studying and formal and informal education.
The government also established such actions in order to socialize tax rules and
policies for the learning of taxpayers.
Filipinos have various issues about the tax rates of the Philippines. They
believe that paying taxes are burdensome and not a requirement to those who
have small businesses. In an article from Accounting System Philippines (2016),
the Philippine Tax Payment System is widely known as one of the most
burdensome in the world. The Philippines has the highest income tax rates in
22
the entire South East Asian region. That is why there is no surprise that
people
23
complain about paying too much in taxes. The problem does not stop there,
employers or company owners, including investors, are also affected. It points
out that paying taxes is cheaper in Iraq and Afghanistan than in the Philippines.
On the other hand, being a self-employed individual also have a duty to
fulfill in the Bureau of Internal Revenue. Stated above in the tax compliance all
about, the word “freelance worker” is not present on the National Internal
Revenue Code regarding whether freelancers can pay income tax or not,
freelance workers may be categorized as self-employed individuals or mixed-
income earners that must pay tax. Also, in an article from Pant (2021), stated that
being self-employed entails different tax duties, such as budgeting for the money
that the self-employed individual will owe to the Internal Revenue Service at the
end of the year. Given the fact that the freelance workers do not have
employers to deduct taxes from their paycheck, they must calculate their
tax burden over the year and put up enough money to cover their payments.
Being tax aware is not only knowing the tax rates and know how the
procedures on paying taxes but also the tax laws. Tax knowledge helps to have
high probability in tax compliance decision of taxpayer. It is important since
knowing tax, in general, may help an individual to create decisions for his/her
future business expenditure/s. According to Rahayu et al., (2017), taxpayers
have awareness when they know the nature of taxation laws and provisions,
aware of the role of paying taxes to the state, aware of the rights and duties to be
applied, list, pay, and report taxes willingly, and finally, measure, pay, and report
taxes correctly. Knowing tax role, understanding taxpayer rights and duties,
24
being able to compute taxation, collect taxes, and record taxes are all signs
of taxpayer awareness.
Tax Morale. Tax morale define as an individual’s willingness to pay taxes and
consider it as an obligation and part of the responsibility of an employee/citizen of the
Philippines or other country. In a book, Tax Morale: What Drives People and Businesses
to Pay Tax? (2019), an analysis of global, explains that an individual’s tax morale - the
more an individual’s educated, he/she has more positive attitude towards paying taxes;
women has higher tax morale than men; and adults are less prone than younger pe
ople to rationalize tax evasion. People are considered to have tax morale when
they are paying taxes and are not affecting their tax compliance due to changes in
tax system, and not doing tax evasion. According to Luttmer & Singhal (2014), the
answer to the tax morale’s importance to the tax compliance of an individual is clearly
stated and studied that thus tax evasion is visible nowadays and should not be
doing by the taxpayers. Thus, tax morale is significant to be assessed in order to
prevent tax evasion, etc.
On the other hand, Park & Yoon (2017), in accordance to the study they held
among the four countries: Japan, China, Korea, and the Philippines, revealed that self
- employed and employed individuals have low tax morale due to their distrust to the
government. In addition, Japan and China has higher tax morale than Korea and
Philippines having low tax morale. The importance of tax morale in the Philippines is
transparent that the government is concern with the compliance of every Filipino citizen
Thus, in a news article from GMA News by Colcol (2021), tax morale need to improve
and that they emphasis the root of the low tax morale of Filipinos are from lack of
competitiveness. Filipinos are not eager to pay tax even though it is mandatory/an
24
obligation because the process is tiresome, and vulnerable to exploitation. Pacaldo &
Ferrer (2020), there are several descriptive definition of tax morale. Tax morale is best
25
described as an individual’s attitude about paying taxes in light of moral ideals and
values. Furthermore, tax morale decreases tax evasion as a moral penalty of illicit
action.
Tax Penalty. Tax penalty is an economic model that is use to have prevention in
terms of non-compliance of other taxpayers in paying taxes. It serves as the
consequence of non-tax compliance. It helps the government to have firmness in tax
compliance of the Filipino citizens. It is visible in other business-minded people the fear
to be penalized and have consequences for their action of non-tax compliance. Tax
penalty serves as the booster of the government to have more taxpayers (Azmi, et al.,
2020). According to Bureau of Internal Revenue, an individual is being penalize; if they
failed to file any tax return as required under the provisions of the Code, failure to pay
the shortfall tax within the time frame specified in the assessment notice, and failure to
pay the entire or a portion of the tax due on any return required to be submitted under
the terms of the Code or its rules and regulations. Thus, required to be pen alize as
the penalty is equivalent to twenty-five percent of amount due.
According to Remali et al., (2018), tax penalty can be characterized as a
disciplinary effort imposed by the tax legislation for any act of activity that is forbidden or
for the failure to do an obligatory act, such as failing to file a return on time or putting in
incorrect or understated returns. A late filing penalty may be assessed if a taxpayer is
obligated to file an income or excise tax return but is unable to do so before the
deadline. Moreover, according to a study, there is a findings that tax penalties and tax
compliance has a significant relationship by income taxpayers. Furthermore, their study
revealed that tax penalty has no optimistic significant influence with tax compliance
and it has encouraged taxpayers to be more rebellious on non-tax compliance to the
government (Oghuma, 2018). Lastly, according to Macatumpag, (2015), Filipinos should
25
be aware to the imposed tax penalties in the government of the Philippines to prevent
being penalized with huge amount. There is right information in any perspective
platforms of the government that may help individuals to be aware to avoid unnecessary
expenses due to irresponsibility.
Research Literature
This section of the literature contains a thorough review of the past
studies gathered by the researchers. It is a detailed summary that can help the
researchers to familiarize with relevant and similar facts to the current study.
According to the study of Mohd Rizal Palil (2010) entitled “Tax knowledge and
Tax compliance Determinants in Self-Assessment System in Malaysia” this study aims
to examine how facilitating elements interact in the creation of a suitable self
- assessment study (SAS), with a special focus on the function of tax knowledge.
Furthermore, the focus respondents of study are the individual Malaysian taxpayers that
aim to determine on how tax knowledge level can influence tax compliance behavior in
self- assessment system. Respondents of 1.073 participated in the study and
was carried out using a countrywide mail survey that took place between June and
August
2007. All gathered data from the respondents are collected through a large scale
national postal survey with five stages to facilitate the study using t-test and ANOVA
method. On the other hand, the surveys they construct are divided into four sections:
Section A – hypothetical questions on tax compliance determinants; Section B – tax
knowledge; Section C – direct questions about tax compliance determinants; and
Section D – respondent background. By examining the fundamental flaws in the current
enforcement system and providing some evidence on the holistic model of Malaysian
individual taxpayer behavior, and the findings of this study propose empirical evidence
26
and provide suggested improvement options for the tax authorities. With a thorough
investigation of the study, it revealed that tax knowledge has a significant impact on tax
compliance even though the level of tax knowledge varies significantly among
respondents, additionally, the result of the study also show that tax compliance is
influenced specifically by probability of being audited, perceptions of government
spending, penalties, personal financial constraints and even the influence of referent
groups. The findings of this study will contribute to the tax literature not only in Malaysia
but also internationally, allowing for comparisons of the Malaysian system with
other more established self-assessment systems as well as suggestions for improving
tax compliance in any developing country that uses such tax administration systems.
While on the study of Amanjeet Kaur (2018), entitled “A study on tax literacy
level among taxpayers (A case study of Derabassi City), that aims to explain their
objectives in the study such us: (1) To study the tax planning measures of an assesses.
(2) To find out the general tax awareness of taxpayers about tax. (3) To study the
influence of tax awareness on voluntary tax compliance decision of taxpayers, for them
to elaborate properly the study they use descriptive research design with a sample of 60
individual taxpayers that are randomly taken from the city. Moreover, researcher not just
used primary data but also a secondary data sources to collect data and were analyzed
using frequency and percentages, all the data gathered, and findings are interpreted
properly. Those primary data was collected by using questionnaire technique where the
questionnaire was administered on 60 respondents belonging to the Derabassi City. In
addition, respondents used in the study was selected by using a simple random
sampling techniques from the population belonging to different age groups and different
income and education level. On the other hand, the secondary data was collected
through internet, websites, research journals and published books. In this study,
it
27
revealed that most of the taxpayers have basic knowledge about income tax provisions
and concept. With this, TRA should champion its literacy campaigns to enhance the
taxpayer’s ability to understand tax laws rates of tax, ang also filing and paying dates
among others. Moreover, TRA should also make taxpayers feels that they part of the
tax system and make them to understand that they are not paying unfair share of taxes.
Additionally, taxpayers should work on how to improve peer attitude that anyone can
belief that neighbors are reporting and paying tax honestly and rewarding taxpayers for
compliance by giving trophies for outstanding tax payment.
According to the study "Tax Knowledge, Tax Complexity, and Tax Compliance:
Taxpayers' View" by Natra Saad (2014), the study aims to examine taxpayers' views on
their level of tax knowledge and perceived complexity of income tax systems.
Furthermore, this study attempts to delve into the underlying causes of noncompliance.
To make this research successful, they used a qualitative approach that aimed to reveal
taxpayers' perceptions of their knowledge and complexity of their country's income tax
system, which is why they invited a total of 2,267 potential participants, but only 30 were
eventually interviewed via phone, consisting of 18 males and 12 females from eight
different regions in New Zealand. The interviews consist of a series of general questions
about tax knowledge, tax complexity, and compliance behavior, which are then recorded
and transcribed. After a detailed investigation, this study discovered that taxpayers
appeared to have insufficient knowledge of the technical aspects of the income tax
system. In terms of tax compliance behavior, this study discovered that most participants
believed that attitude, perceived behavioral control, complexity, and fairness perceptions
had all contributed to taxpayer noncompliance.
According to Diana Onu and Lynne Oats' (2018) study, Tax Talk: An Exploration
of Online Discussion Among Taxpayers, the goal is to educate the world about tax
28
compliance obligations through an online discussion forum. To ensure the success of
this research, they collected data from 400 respondents who are user comments about
tax forums for self-employed professionals in the UK, where they observed naturally
occurring behavior and interaction but in an online environment. They also use the
qualitative method and a virtual ethnographic approach, which allows them to collect
data that was not generated by the researcher and reflects people's naturally occurring
concerns. Furthermore, this approach provides insights into taxpayer attitudes and
opinions, and they generally believe that online communication allows for greater
freedom of expression than traditional research settings. As a result of this research, it
was discovered that one of the primary concerns of taxpayers interacting on online
forums was to make sense of laws and regulations, receive straightforward
explanations from other forum users, and understand which rules apply to their
situation. To summarize, data collected revealed two distinct approaches by taxpayers
to laws and regulations. First, make logical sense of the rules which already exist.
Finally, they must navigate the legal landscape by determining which rules apply to their
situation and how to apply those rules in their favor.
Ainisa Putri Sirait (2018) conducted a study titled "The Influence of Expediency
Taxpayer ID Number, Tax Officers Service Quality, and Modernization Tax
Administration System on Tax Compliance of Freelancer Taxpayers in Tanah Abang
Satu." The purpose of this research is to identify the factors that can influence taxpayers'
compliance with their tax obligations.. To successfully assess this research, the
researchers used a quantitative analysis approach that can describe this study as realist
and positivist, with the assistance of the participation of freelancers in Jakarta as
taxpayers in the Tanah Abang Satu tax office, which reached a total of 1,059 as of
2017. Because there are a large number of respondents, the researcher uses the
Slovin
29
Formula to determine the total sample that can be used for the questionnaire, with 91
being the minimal sample. The researcher handed out 110 questionnaires, but only 102
were returned. They use a sampling method to collect data by distributing
questionnaires to registered freelance taxpayers in this country. In gathering
information, the researcher used a questionnaire with a likert scale that was
distributed manually, as well as an online questionnaire created with Google Forms.
As a result of a thorough investigation in this study, the results explain that first,
taxpayers who perceive the convenience of a tax id number are more likely to fulfill their
tax obligations based on general provisions and tax procedures. Second, the tax
administration system has a positive but not significant influence on tax
compliance, which means that freelance taxpayers believe the service quality has no
effect on their willingness to pay the tax. Finally, taxpayers believe that modernizing the
tax administration system is beneficial to their tax.
The study by Suparna Wijaya, Laras Salsabila Yunanda, and Waidatin Nur
Azizah(2020), titled "Study of Discount Tax Requirements for Personal Taxpayers for
Increasing Tax Compliance in Indonesia," aims to assess whether the policy is truly
enforced in Indonesia and to determine the potential effects that may occur when the
policy is implemented. In order to collect data for this study, the researcher chose
individual taxpayers from across the country to take part in the study. Furthermore, the
researcher chose a descriptive qualitative approach, which allowed them to collect
concrete data for the study. Following a thorough investigation of this study, the
researchers conclude that discounted tax rates are given to compliant personal
taxpayers in order to increase compliance of individual taxpayers in paying tax payable
and submitting Annual Tax Returns. On the other hand, taxpayers who do not fall into
the category of compliance will receive a refund without the need for inspection every
30
time there is an overpayment. Finally, individual taxpayers can be constantly
spoiled when they are given tax breaks in the form of discounted tax rates.
Sussanne Leder and Lucia Mannetti et al. (2010) conducted research titled
"Regulatory Fit effects on perceived fiscal exchange and tax compliance," which is a
study with two objectives. First, investigate how the fit between information framing and
taxpayer regulatory focus affects perceived fiscal exchange and tax compliance. Lastly,
understand the significance of taxes, strengthen their perception of fiscal exchange, and,
as a result, increase tax compliance. To ensure the success of this study, eighty working
students, comprised of 46 men and 34 women, volunteered to take part. All data were
collected at the Sapienza University of Rome, specifically at the faculty of political
sciences, with a sample of 65 employees and 14 freelance professionals. This study
employs a two-by-two design for data collection, with experimentally induced regulatory
and goal framing as independent variables. The first study concluded, after a thorough
investigation, that participants estimated the percentage of tax payments returned
to them in the form of public goods and services as a higher under regulatory fit.
Furthermore, it was discovered that a stronger intrinsic willingness to pay tax was
associated with a higher perception of fiscal exchange. While the design used for the
second objective is the same as for the first, the number of respondents is different:
eighty-three taxpayers, 46 men and 37 women, participated, and a sample of 80
employees, three of whom are freelance professionals. This study found that the
compatibility of regulatory focus and framing affects tax compliance, so the two
objectives for this study were interaction effects between regulatory focus and goal-
framing on perceived fiscal exchange and willingness to pay tax.
The study "The Determinants of Tax Compliance: Loving or Fearing" by Arung
Gihna Mayapada et al (2021) aims to analyze the internal and external determinants of
31
tax compliance. According to this study, the internal determinant is the feeling of love for
the motherland, which is manifested through the soul of patriotism and nationalism,
whereas the external determinant is tax sanctions, which cause taxpayers fear.
To complete this study, they used a quantitative method with a survey approach to
collect all informative data by distributing questionnaires to 100 individual taxpayers
registered at the Tax Office of Palu, who served as the study's main respondents. At
the same time, the sampling method used to collect a total of 94 respondents is
a random sampling method calculated using the slovin formula. As a result, this study
discovered that nationalist taxpayers are more obedient in carrying out tax
obligations than non - nationalist taxpayers, and that tax sanctions cannot guarantee
tax compliance. These findings confirm that patriotism and nationalism are two distinct
ways of loving one's country.
On the other hand, K.G Asela Gamini Bandara and W.M.R.B Weerasooriya's
(2019) research titled "A conceptual Research Paper on Tax Compliance and It's
Relationships" aims to elaborate the various views held by various scholars in
connection with tax compliance and its relationships with other variables in order to
identify the different concepts and their importance in the current context in Sri Lanka.
This study focuses on the conceptual ideas held by various researchers in relation to the
specific area. They examined 250 research articles, previous literature published by
various organizations and authors, and finally discovered 100 articles that were relevant
concepts and validity to the current context of the study. After evaluation, this study
successfully illustrates the various views held by various scholars in connection with tax
compliance and its relationships with other variables, with the goal of gaining new
knowledge as well as broadening the knowledge base on this specific subject area,
32
which is important for any future researchers to identify the different concepts and
their relative importance to the current context in Sri Lanka.
Similarly, Suhaila Abdul Hamid's (2013) study, "Tax Compliance Behavior of Tax
Agents: A Comparative Study of Malaysia and New Zealand," seeks to comprehend tax
compliance behavior of tax agents in Malaysia and New Zealand by examining some
selected factors that contribute to their ethical decision making while performing their
professional roles. To obtain responses from tax agents in Malaysia and New Zealand,
they used a quantitative method (survey) and a qualitative method (telephone interview)
to collect data for the study. In a single study, the researcher used a combination of
quantitative and qualitative approaches, with tax agents in public practice serving as
samples to reflect the reality of tax compliance behavior of tax agents while performing
their engagement roles. The researcher compiled a list of 500 tax agents from the
Malaysian Inland Revenue Board (MIRB) website using a systematic random sampling
approach. However, to obtain a more robust sample, the researcher used a snowballing
approach by requesting that those tax agents who were chosen from the website
distribute another two sets of the questionnaire survey that is divided into three sections.
The study revealed that both Malaysian and New Zealand interview participants have
similar understandings of tax compliance. Interview participants from Malaysia and New
Zealand understand tax compliance as complying with the tax act, rules, regulations,
and the tax authorities' requirements. In general, interviewees in both countries agreed
that their attitude could influence their tax compliance behavior.
33
Other Literature
Demographic Profile. The first part of the research instrument was the
demographic profile of the respondents. This consist of age, sex, type of work and years
as freelance worker.
Age. As derived on the study of Petry (2002), the age of the respondents were
categorized into young adults with ages of 18 – 35 years, middle age adults with ages
of
36 – 55 years, and older adults with age older than 55.
Sex. According to Council of Europe, The biological and physiological traits that
distinguish humans as female or male are referred to as sex. These biological features
are not mutually exclusive, as some people have both, but they do tend to distinguish
humans as females or males.
Type of Work. The field that hire the most freelancers include accounting and
finance, administrative, writing, customer service, computer and IT, medical and health,
editing, HR and recruiting, and education and training (FlexJobs, 2021)
Years as Freelance Worker. The years as freelance worker was categorized into
less than one year, one to three years, four to six years, seven to ten years, and more
than ten years as derived on a survey than in United States.
Synthesis
The parallels and differences between the previous related literature and the
current study were discussed in the research. This is done to determine the study's
relevance. This section will solely summarize the selected related literature to highlight
the most relevant literature to the current study.
34
The study of Mohd Rizal Palil (2010) aims to examine how facilitating elements
interact in the creation of a suitable self-assessment study (SAS), which is similar
from the current study since it seeks to measure the tax compliance among freelance
workers in Lipa City. They are similar in using questionnaires to grasp the necessary
information needed in the study. Also, the research design used by both study is the
same which is the descriptive research method design. The current study’s parts of
questionna ire differ from the past study as it only includes the profile of the
respondents and specific questions that will involve tax knowledge, tax awareness,
tax morale and tax penalty. Just like Moreno’s study, the current study’s findings will
contribute to the tax literature not only in Philippines but also internationally.
The objective of the study elaborated by Amanjeet kaur (2018), just like the goal
of the current study, aims to find out the general tax awareness of taxpayers. Both
studies used primary and secondary data in gathering all the information needed for the
study. The studies used descriptive research design. In determining the sample, the
previous study used random sampling while the present study used snowball
sampling. In getting the primary data, both studies used questionnaires while their
secondary data was collected through internet, websites, research journals and
published books.
In terms of determining the level of tax compliance and the reasons for taxpayer
noncompliance, the researcher's current study is likely similar to that of Natra Saad
(2014). However, the approach used in the previous study differs from the current study
in which current study uses a descriptive method to collect data that can be used in the
study. Also, the previous study collected data via telephone, whereas the current study
collected data using questionnaires through Google Forms. The number of
respondents in the previous study is bigger than the number of participants in the
35
current study. In terms of the content of the questionnaires, both study had
questions about tax
36
knowledge, however the current study also included questions about tax awareness, tax
morale, and tax penalty whereas the previous study tax complexity and tax compliance
behaviour. Regardless of the differences and similarities between the two studies, what
matters most is that they both aim to provide students with sufficient knowledge of tax
compliance.
Diana Onu and Lynne Oats' (2018) study titled "Tax Talk: An Exploration of
Online Discussion among Taxpayers" has a similar goal to the current study wherein it
aims to educate taxpayers about tax compliance and their obligations. The number of
respondents in this study is 400, while the current study has a total of 100 participants.
The respondents in the current study are freelancers in Lipa City, whereas the
respondents in the previous study are self-employed professionals in the United
Kingdom. Both studies use the same data collection method, which is a virtual
approach. In contrast to the previous study, which included information about tax
knowledge, tax awareness, tax morale, and tax penalties, this study revealed taxpayers'
attitudes toward laws and regulations.
On the other hand, the respondents in the current study and Ainisa Putri's study
are similar with regards to the respondents of the study, the freelancers. In addition, for
the study's data collection, the previous study used paper questionnaire which was
distributed in actual while the current study used an online questionnaire through
Google forms which was distributed via email and social media accounts. However,
unlike the previous study, which had a total of 110 respondents, the current study only
has 100 participants. They are also similar in terms of the sampling design that they
employ in their studies. The previous study used a quantitative approach to data
collection, which is similar to the method used in the current study to determine the
36
relationship to the overall response. Lastly, the current study used snowball sampling
as their sampling
37
method and simple random sampling on getting the total number of respondents while
the previous study used the Slovin formula on determining the total sample. To
summarize, both studies collected necessary data through sampling.
The study of Suparna Wijaya, Laras Salsabila Yunanda, and Waidatin Nur
Azizah(2021) "Study of Discount Tax Requirement for Personal Taxpayers for
Increasing Tax Compliance in Indonesia" seeks to determine whether Indonesia's tax
compliance policies are truly enforced, whereas the current study seeks to assess tax
compliance among freelancers. Both studies do not use the same data collection
process; the current study uses a descriptive quantitative approach, while the previous
study uses a descriptive qualitative approach, but they are similar in terms of selecting
respondents wherein they both chose freelancers to participate in the study. The
number of freelancers as a respondent is not stated in the previous study, whereas
the current study clearly states that the number of respondents consist of 100
individuals.
"Regulatory Fit Effects on Perceived Fiscal Exchange and Tax Compliance," a
study conducted by Susanne Leder and Lucia Manneti et al (2010), differs from the
current study in that it focuses on one study that seeks to measure tax compliance
among freelancers, whereas this study is a combined study. The respondents in
this study are individual freelancers, whereas the respondents in the previous study
are a mix of working students, employees, and freelance workers. Both studies use
questionnaires and surveys to collect data, and the current study employs a sampling
design, whereas the previous study employs a two-by-two design with experimentally
induced regulatory and goal framing as independent variables.
The study of Arung Gihna Mayapada et.al. (2021) entitled "The Determinants of
Tax Compliance: Loving or Fearing" is similar to the current study in terms of the total
38
number of respondents, 100 individual taxpayer participants. Just like the prev
ious study, the current study used random sampling in getting the total number
of respondents. Furthermore, both studies used the same instrument in gathering data
to the respondents which is the questionnaire.
The current study differs from the study entitled "A Conceptual Research
Paper on Tax Compliance and its Relationships". This study gathered data from
research articles, previous research related to the study's focus, published books, and
research while the current study gathered information from books, journals, and internet
articles. The previous study examined 250 research articles and previous literature
published by various organizations and authors, eventually identifying 100 articles with
relevant concepts and validity to the current context of the study. Both studies seek if
there is a relationship between the tax compliance and other variables. In addition,
both studies are relevant to the future researchers and served as source of
information to other related researches.
The present study is different from the previous study entitled “Tax Compliance
Behavior of Tax Agents: A Comparative study of Malaysia and New Zealand”. This
previous study makes a comparison of two country to comprehend their tax behavior
unlike the present study that focus in one city only. the approaches used in this previous
study is different to the present study. The researcher in this previous study used a
combination of quantitative and qualitative approach to collect data while the present
study sticks to one approach to gather information. This previous study included 500 tax
agents as respondents, whereas the current study revealed a total of 100 individual
freelance workers. The study used different method in getting the total number of
respondents whereas the previous study used a systematic random sampling while the
current study used a simple random sampling.
39
Chapter III
RESEARCH METHODOLOGY
This chapter deals with the methods and procedures that the researchers
considered in order to gather the necessary data such as research design,
respondents of the study, sampling design, data gathering instrument, data
gathering procedure, and statistical treatment of data.
Research Design
The researchers used descriptive research design to gather all the
necessary information.
The researchers believed that this approach is the best method for
measuring the tax compliance of freelance workers in Lipa City. The method
focuses on the description of individual variables rather than the relationships
between variables. Moreover, this method ensures that it reliably and
systematically described the population and the condition being studied.
According to McCombes (2020), descriptive research attempts to
characterize a group, condition, or phenomena in a systematic and precise
manner. It will answer the questions of what, where, why, and how, but not why.
To analyze one or more factors, a descriptive research design may use a range
of research techniques.
Sampling Design
The researchers used snowball sampling in the selection of the
respondents in Lipa City. As stated by Bhat (2019), snowball sampling, also
known as chain-referral sampling, is a non-probability sampling method in which
the samples include characteristics that are uncommon to detect. This is a

39
sampling method in which current subjects refer new subjects to a test report.
The researchers preferred this sampling method because it would be easier for
them to find possible respondents as referrals allow finding subjects simple and
quick since they come from reputable sources.
Respondents of the Study
The respondents of this study were the freelance workers in Lipa City. The
researchers used the simple random sampling in getting the total population of
respondents. Simple random sampling is one of the simplest forms of collecting
data from the total population. Under simple random sampling, each member of
the subset carries an equal opportunity of being chosen as a part of the
sampling process (The Economic Times, 2021). With this, the researchers
decided to have a total respondent of one hundred (100) persons.
Data Gathering Instrument
The goal of the study is to assess the tax compliance of freelance workers
in Lipa City by using a scaled questionnaire. Questionnaires had been always the
main tool to gather information from the respondents. The questionnaire was
divided into two parts. The first section would provide information about the
respondent's demographic profile such as age, gender, type of work, and years
as a freelancer. The second section focused on the tax compliance of freelance
workers in terms of tax knowledge, tax awareness, tax morale and tax penalty.
The researchers made use of the questionnaires on the other related studies
and reconstructed it in a manner that best fits on the study’s main subject.
40
The data gathering instrument went through a validation process through
the adviser, chairman and members of panel, and two industry experts who are
working as a professor of taxation course. The validation process took more than
one week because some questionnaires needed to be aligned with the study’s
main subject. When it was validated, the researchers created Google forms
consisting of the letter asking the respondents for their full participation in the
study and the questionnaire. After this, the researchers conducted a dry run on
the freelance workers in Padre Garcia, Batangas by posting the link of the
Google Form on their Facebook accounts. The researchers collected the
necessary information within 10 days and had twenty responses. The
researchers believed that this would be enough to test the reliability of the
questionnaires. The result of the dry run was sent to the statistician and was
validated within a day. The statistician concluded that the questionnaire was
reliable having a Croncbach’s alpha of 0.959.
When passed the reliable test, the researchers immediately distributed the
questionnaires to the freelance workers in Lipa City. The researchers posted on
their Facebook account about the searching of possible respondents for the
study. They also asked some of freelance workers whom they know to participate
in the study and asked for referrals. This was done through the use of Google
forms.
Likert Scale. To determine the tax compliance of freelance workers in Lipa
City, the following scoring was used:
The highest rate is four (4) for strongly agree and (1) for strongly disagree.
41
Scoring of Interpretation
Scale Range Verbal Interpretation
4 3.50 – 4.00 Strongly Agree/Great Extent
3 2.50 – 3.49 Agree/Moderate Extent
2 1.50 – 2.49 Disagree/Slight Extent
1 0.00 – 1.49 Strongly Disagree/Least Extent

Figure 3. Likert Scale
Data Gathering Procedure
The researchers used different reference materials to collect information
that are related to the study.
The research procedure started with searching information to formulate a
topic. Different topics were presented to the research adviser, Upon the approval
of the research title, the researchers started searching for information related to
the study. Due to the pandemic, the researchers made use of journals, book,
articles in the internet, etc which is easily accessible in gathering such data.
After the defense of Chapter I to Chapter III of the study, the researchers
constructed a scaled questionnaire regarding the topic. It underwent validation
process from the chairman and all the members of panels as well as two
industrial experts in the field of taxation. The two industrial experts were
consulted to ensure that all the questions are in line or relevant to the study.
After the approval of the questionnaires, the researchers started to have their
dry run in Padre Garcia. The researchers posted in social media particularly in
Facebook to look for a possible respondent. They also messaged some people
who lives in the area to ask for referrals. They sent the link of Google form to
the selected
42
freelance workers wherein it includes the letters to the respondents asking for
their full participation in the study. The link also includes the questionnaire which
was sent through emails and social media accounts. The dry run took ten days
from November 1 to November 10, 2021. The researchers then sent the result to
their statistician for validation. The result of validation was received by the
researchers on the same date. On the 11th day of November 2021, the
researchers started their survey in Lipa City. They did the process on how they
gather information on their dry run. Surveying one hundred freelance workers
took ten days from 12th day of November to 21st day of the same month. As the
respondents gave their response/answers to the questions, the researchers
tallied the data then sent it to the statistician. After having the result of validation,
the researchers analyzed and interpreted the data.
Statistical Treatment of Data
The data gathered from the survey were sum up, classified, tally, analyzed
and interpreted. The data was used to know the tax compliance of freelance
workers in Lipa City. The researchers used the following statistical tools.
Percentage. It is use in presenting the profile of the respondents with
respect to age, sex, type of work, and years as freelance worker. This will
be used to determine the quantitative relation to the whole response. The
process of gathering the percentage was dividing the frequency (sum of
responses) by the total number of responses. To compute for the percentage (P),
the formula is:
P = (f/n)*100
Where:
43
P = percentage
f = frequency
n = total number of respondents
The above formula is applied to the profile of the respondents.
Weighted Mean. This is synonymous to average. It is summing of all the
value of the item divided by the number of items. This will be used to find out and
interpret the data with regard to the tax compliance of the respondents.
Anova Test - It will be used to determine the significant difference on the
tax compliance of the respondents when grouped according to their age, sex,
type of work, and years as freelance worker.
44
Chapter IV
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
This chapter reflects the statistical analysis and tables that highlight the
result of the study. Likewise, it includes the interpretation and discussion of the
results. The data gathered from their respondents were tallied, analyzed and
presented in a tabulated form to be able to respond to the specific
question posted in the statement of the problem and to facilitate interpretation.
1. Demographic Profile of the Respondents
This section presents the distribution of the respondents’ profile variables
namely: age, sex, type of work, and years as freelance worker with their
corresponding frequency and percentage.
1.1 Age
Table 4.1.1 shows the demographic profile of the respondents in terms of
age.
Table 4.1.1
Distribution of the Respondents in terms of their Age
Age Frequency Percentage (%)
18-35 years old 79 79
36-55 years old 18 18
56 years old and above 3 3
Total 100 100

The table shows the frequency and percentage distribution of the
respondents in terms of age. It can be seen in the above data that the age of
18-
45
35 years old got the highest frequency of seventy-nine (79) or 79 percent. On
the other hand, there are eighteen (18) respondents who are in the age
bracket of
36-55 years old which is equal to 18 percent. Age of 56 years old and above
got the lowest frequency of three (3) or 3 percent.
According to the researchers' view, most Lipa City respondents are
between the ages of 18 and 35 years old. This suggests that young individuals
begin working as soon as they reach the legal age. This also indicates that
young people aim to be successful in their fields as early as they can. The
statistics, on the other hand, suggest that the age group of 55 and up has
the lowest frequency, implying that there are old people who still works at their
old age and freelancing doesn’t have an age limit compared to those who are
employed wherein once they reach the age of 65 they are required to retire.
The result was supported by ABS CBN News (2020) which states that the
report of Payoneer's Freelancer Income Report in the Philippines shows
freelancers under 35 years old received the greatest proportion of 67 percent.
Furthermore, Paypal polled over 500 Filipino full- and part-time computer-based
freelancers, as well as "considerers," or those planning to go freelance in
the next six months. The survey discovered that both categories are made up of
young people—half of freelancers were under 30, while considerers were
between the ages of 25 and 39 (Juego, 2018).
According to Shenker (2020), 37% of the freelancers are in the age of 55
years old and above. Finding work after 50 has proven more complicated
46
in recent years. In part, this may be due to the sheer number of people
seeking
47
freelance work and the willingness of younger people to accept lower fees to
gain experience. Older people are under more pressure than ever to remain
relevant and prove to hiring managers (who are often younger) that they are not
past their prime. Thus, one of the reasons why they enter the field of freelancing.
1.2 Sex
Table 4.1.2 shows the demographic profile of the respondents in terms
of sex.
Table 4.1.2
Distribution of the Respondents in terms of their Sex
Sex Frequency Percentage (%)
Male 52 52
Female 48 48
Total 100 100

Table 4.1.2 shows that male got the highest percentage of the
respondents with a frequency of fifty-two (52) or 52 percent and the
lowest percentage are female with a frequency of forty-eight (48) or 48 percent.
Based on the analysis of the researchers, most of the respondents are
male. This implies that males prefer to work on their own rather than having a
boss around them. Males are known to be a strong and independent when it
comes to work. They have a pride that they care about. Since you are the boss
of yourself in freelancing, they tend to enter this field. In addition, men are the
one who provides for their family and they can do this through freelancing since
it is easy to make money on this job.
48
The findings were supported by the survey result provided by Philippine
Statistics Authority (2020), employment rate was higher among men compared to
women. In January 2020, more than sixty percent (60.8%) of the estimated 42.5
million employed persons were males while employed females were reported at
39.2 percent. This indicates that most men are into working and is believed to be
responsible in providing for the family according to United Nations (2011).
1.3 Type of Work
Table 4.1.3 shows the demographic profile of the respondents in terms of
type of work.
Table 4.1.3
Distribution of the Respondents in terms of Type of Work
Type of Work Frequency Percentage (%)
Accounting and Finance 12 12
Administrative 6 6
Writing 6 6
Customer Service 26 26
Computer and IT 19 19
Medical and Health 4 4
Editing 12 12
HR and recruiting 6 6
Education and Training 9 9
Total 100 100

According to Table 4.1.3, respondents in the customer service category
had the highest frequency of twenty-six or 26 percent, then followed by computer
& IT category with a frequency of nineteen (19) or 19 percent. In addition, both
49
accounting and finance category, and editing category got a frequency of twelve
(12) or 12 percent. This is followed by education and training category with a
frequency of nine or 9%, administrative category, writing category, and HR and
recruitment category with a frequency of 6 or 6%, and medical and health
category with a frequency of 4 or 4%.
Based on the researchers’ interpretation, it can be said that most of the
freelance workers in Lipa City, Batangas falls under the category of customer
service since this is one of the easiest freelance jobs according to Padilha
(2021). In addition, Filipinos are known to be fond of giving service that
showcases their skills and talents. On the other hand, medical and health
category got the lowest frequency which indicates that only few medical and
health workers enter freelancing.
Customer service is a huge and rapidly-growing profession, according to
the findings of the Indeed Editorial Team (2021). A position in customer service
allows you to create skills that you can transfer to practically any business, with
roles available at all levels of expertise and lots of opportunities for promotion.
This indicates that customer service is a simple field to enter as many companies
need them. In addition, most of the medical and health professionals migrate to
abroad for better opportunities said in the report of Asia Pacific (2021). This
explains why there is a decline in number of respondents in the field of medical
and health.
50
1.4 Years as Freelance Worker
This variable pertains how long or how many years the respondent had
been working. Table 4.1.4 shows the frequency and distribution of the business
according to number of years as freelance worker.
Table 4.1.4
Distribution of the Respondents in terms of Number of Years as Freelance
Worker
Years as Freelance Worker Frequency Percent
Less than a year 42 42
1 – 3 years 35 35
4 – 6 years 17 17
7 – 10 years 2 2
More than 10 years 4 4
Total 100 100

Table 4.1.4 shows the distribution of the respondents’ profile in terms of
years as freelance worker. It can be gleaned that a frequency of forty-two (42)

or
42 percent have been freelancing for less than a year, followed by 35
respondents or equivalent to 35 percent who have been freelancing for 1-3
years, and a frequency of seventeen or 17 percent who have been
freelancing for 4-6 years. Four respondents, or 4 percent of the total have been
freelancing for more than ten years, whereas just two respondents, or 2 percent
have been freelancing for seven to ten years.
51
Upon analyzing the survey result, the researchers found out that
the majority of freelance employees in Lipa City, Batangas, have been
working
52
independently for less than a year. This might be because of the coronavirus
pandemic that causes many employees to lose their jobs, prompting many to
turn to freelancing. On the other hand, there are just a few freelancers who have
been working for 7-10 years, implying that freelancing existed before the
epidemic and is now booming.
This is supported by the statement of Maurer (2020) saying that at the
start of the coronavirus epidemic, a major portion of the work force began
freelancing for the first time. Meanwhile, according to an annual assessment of
the freelance economy, social distancing tactics caused typical gig workers to
cut back on labor. According to Nagamora (2020), to augment employees’ loss of
income due to the “no work, no pay” scheme, they were left with no other option
but to consider the only industry spared by the virus – the Gig Economy or
freelancing.
2. Tax Compliance of Freelance

Worker
2.1 Tax Knowledge
Table 4.2.1 shows that tax compliance of freelance workers in terms of
tax knowledge.
53
Table
4.2.1
Assessment on Tax Compliance of Freelance Workers in terms of
Tax
Knowledg
e
Weighted
Statement Interpretation
Mean
1. I can understand and interpret the tax rules. 3.25 Compliant
2. I know how the procedure for paying taxes. 3.11 Compliant
3. I know the function and benefits of the Tax
3.27 Compliant
Identification Number.
4. I know the tax collection, the basis of tax
collection and may or not the taxpayer pays it in 3.28 Compliant
installments.
5. I know the basic of accountancy and recording,
3.07 Compliant
which must be done by taxpayers in general.
Composite Mean 3.20 Compliant
Table 4.2.1 presents the tax compliance of the respondents in terms of tax
knowledge. It can be seen that there is a composite mean of 3.20 with verbal
interpretation of compliant. Item number 4 got the highest weighted mean of
3.28 with a verbal interpretation of compliant stating “I know the tax collection
and may or not the taxpayer pays it in installments”. On the other hand, item
number 5 which states “I know the basic of accountancy and recording,
which must be done by taxpayers in general” got the lowest weighted mean of
3.07 and verbal interpretation of compliant.
The result could mean that freelance workers from Lipa City are modestly
knowledgeable on tax . They understand tax collection, the basis of tax
collection and may or not the taxpayer pay it in installments. As a taxpayer,
having such knowledge is essential to understand the concept of taxation. This
54
could be brought by their involvement in tax report preparations but since their
knowledge is still on the average, this implies a room for greater promotion of
taxpayers’ compliance.
This is supported by Saad (2014) contention that tax knowledge is an
essential element to have voluntary tax compliance from taxpayers. Thus, the
result of having knowledge about tax leads to higher probability in tax
compliance. Knowing procedures and tax laws are more likely to help the
government to have an ease in supporting and convincing citizens, specifically
freelance workers, to pay their taxes.
In an article, Tax Compliance of Freelancers in the Philippines by
Pagaspas, some people have the misconception that they should not have to
pay because their income is smaller than their expenses. Knowing the tax
knowledge about taxation could help freelance workers to understand the
importance of paying tax. Moreover, the importance of knowing basic accounting
and tax accounting is visibly helpful for an individual.
Honea (2020) said that it is true that freelance workers don’t need a
degree in accounting to their career. However, having some accounting
knowledge can help them keep an eye on your money, maintain tax compliance,
and communicate with their bookkeeper or accountant (if you want to go that
way), among other benefits.
55
2.2 Tax Awareness
tax awareness.
Table 4.2.2
Assessment on Tax Compliance of Freelance Workers in terms of Tax
Awareness
Weighted
Mean
1. I am transparent to my income. 2.99 Compliant
2. I file income tax for self-employed professional/
2.82 Compliant
freelance workers.
3. I pay income tax even though tax rates changes. 2.94 Compliant
4. I pay tax even though I am not tax aware. 2.85 Compliant
5. I pay income tax as freelance worker and
2.68 Compliant
considered it as responsibility.
Table 4.2.2 shows that tax compliance of respondents in terms of tax
awareness. It showed a composite mean of 2.86 with verbal interpretation of
compliant. Item number 1 which is about being transparent to his/her income had
the highest weighted mean of 2.99 and verbal interpretation of compliant while
item number 5 stating “I pay income tax as freelance worker and considered it
as responsibility” had the lowest weighted mean of 2.68 and verbal interpretation
of compliant.
Based on the researchers’ observation freelance workers are compliant in
terms of tax awareness. It shows that the freelance workers are transparent in
declaring their income. They are not hesitant in declaring the exact and with
56
fairness income. However, few of the freelance workers pay their income tax
as
57
freelance worker and consider it as responsibility. This implies that most
freelance worker view paying tax as an obligation rather than a responsibility.
Hastuti (2014) said that according to the law, taxation is likely to be a
resident's obligation; as a result, paying the tax is a prior investment, and any
necessary information must be presented honestly. Furthermore, there is no
excuse for not understanding tax, as indicated in the study, tax knowledge
may be gained through self-study, formal and informal education. The
government also took such steps in order to socialize tax regulations and policies
so that taxpayers could learn them.
In accordance with Rahayu et al., (2017), taxpayers are aware of the
nature of taxation laws and provisions when they are aware of the role of paying
taxes to the state, aware of the rights and duties that must be applied, freely list,
pay, and report taxes, and finally, correctly measure, pay, and report taxes. Tax
awareness includes knowing one's role in the tax system, understanding one's
rights and responsibilities as a taxpayer, and being able to compute, collect, and
record taxes.
2.3 Tax Morale
tax morale.
58
Table 4.2.3
Morale
Weighted
Mean
1. I honestly declare earnings in my tax returns. 2.76 Compliant
2. Evading tax have never come into my mind. 2.77 Compliant
3. Tax compliance is a social norm. 2.89 Compliant
4. My credentials and personal connections don’t
2.77 Compliant
give me the right to evade tax.
5. False income declaration will generate anxiety,
guilt and shame to me. 2.77 Compliant

Table 4.2.3 shows the tax compliance of the respondents in terms of tax
morale. It showed a composite mean of 2.79 with verbal interpretation of
compliant. The item number 3 which says that tax compliance is a social norm
had the highest weighted mean of 2.89 and verbal interpretation of compliant
while item number 1 which is about being honest declaring earnings in his/her
tax returns had the lowest weighted mean of 2.76 and verbal interpretation of
compliant.
terms of tax morale. It marks that the freelance workers are considering tax
compliance as social norm. They see tax compliance as a social practice brought
by the government. On the other hand, the lowest mean is about declaring
earnings in tax returns honestly. In this way, freelance workers can avoid tax
penalties.
59
According to Colcol (2021), tax morale must improve, and they emphasize
that the core of Filipinos' low tax morale is a lack of competition. Filipinos are
apprehensive about paying taxes, despite the fact that it is a legal requirement,
because the process is time-consuming and prone to manipulation.
Moreover, tax compliance can be easily manipulated by the society since it is
considered as just a practice to some.
In a book, Tax Morale: What Drives People and Businesses to Pay Tax?
(2019), an examination of global tax morale reveals that the more educated a
person is, the more favorable attitude he or she has toward paying taxes; women
have better tax morale than men; and adults are less likely than younger
individuals to rationalize tax evasion. People are said to have tax morale if they
pay their taxes on time and do not deviate from their tax compliance owing to
changes in the tax system. They are also not engaging in tax evasion.
HDC Life (2016) states that many people appear to believe that submitting
tax returns is optional, and hence reject it as unneeded and onerous. As we'll
see, this isn't a very healthy tax-filing mindset. Filing tax returns is a yearly
action that every responsible citizen of the country is expected to do. It serves as
a foundation for the government to evaluate the quantity and means of
expenditure of people, as well as a platform for assesses to request refunds
and other types of assistance as needed. Thus, it is important to be honest in
declaring you tax returns as it will also benefit you.
60
2.4 Tax Penalty
tax penalty.
Table 4.2.4
Penalty
Weighted
Mean
1. I am paying income tax on time to prevent tax
2.84 Compliant
penalty.
2. I pay the shortfall tax within the time frame Compliant
2.77
specified in the notice.
3. I am aware to the imposed tax penalties of the Compliant
2.88
tax system of the Philippines.
4. Tax penalties affects my tax compliance due to Compliant
2.82
the penalty rate.
5. I am paying income tax to lessen the hassle of Compliant
2.91
paying tax penalty.
Table 4.2.4 illustrates the tax compliance of the respondents in terms of
tax penalty. It showed a composite mean of 2.84 with verbal interpretation of
compliant. The item number 5 which is about paying income tax to lessen the
hassle of paying tax penalty had the highest weighted mean of 2.91 and verbal
interpretation of compliant while the item number 2 which is about paying the
shortfall tax within the time frame specified in the notice had the lowest weighted
mean of 2.77 and verbal interpretation of compliant.
terms of tax penalty. It marks that the freelance workers are paying income tax
to lessen the hassle of paying tax penalty. They are aware in the
consequences
61
and hardships they will face if they did not comply on paying their tax. Some
freelance workers sometimes pay their shortfall tax within the time frame
specified in the notice because it will result to paying tax penalty if they did not.
According to Remali et al., (2018), tax penalty can be characterized as a
disciplinary effort imposed by the tax legislation for any act of activity that is
forbidden or for the failure to do an obligatory act, such as failing to file a
return on time or putting in incorrect or understated returns. A late filing penalty
may be assessed if a taxpayer is obligated to file an income or excise tax return
but is unable to do so before the deadline.
According to Bureau of Internal Revenue, an individual is being penalize; if
they failed to file any tax return as required under the provisions of the Code,
failure to pay the shortfall tax within the time frame specified in the assessment
notice, and failure to pay the entire or a portion of the tax due on any return
required to be submitted under the terms of the Code or its rules and
regulations. Thus, required to be penalize as the penalty is equivalent to
twenty-five percent of amount due.
2.5 Summary of the Weighted Mean of Different Variables
Table 4.2.5 shows the summary of the weighted mean of different
variables such tax knowledge, tax awareness, tax morale and tax penalty.
62
Table 4.2.5
Summary of Weighted Mean of Different Variables
Variable Weighted Mean Interpretation
1. Tax Knowledge 3.20 Compliant
2. Tax Awareness 2.86 Compliant
3. Tax Morale 2.79 Compliant
4. Tax Penalty 2.84 Compliant

Table 4.2.5 shows that tax compliance of the respondents in terms of tax
knowledge, tax awareness, tax morale, and tax penalty is compliant. Tax
knowledge got the highest weighted mean of 3.20 while tax morale got the
lowest weighted mean of 2.79.
Based on the researchers’ observation, freelance workers have an
adequate knowledge to comply with tax. They understand why and how taxation
system works. In addition, they are also a good citizen because they contribute a
portion of their income to the country and most of them doesn’t evade tax
According to research done by Kassa (2021), tax knowledge has a
beneficial impact on taxpayers' willingness to participate in tax evasion. It is
generally recognized that taxpayers would be pushed to engage in tax evasion if
they are not sufficiently informed about the necessity of tax for country
growth and the destructive consequences of tax evasion.
63
3. Significant Difference on Tax Compliance of the Respondents When
Grouped According their Profile Variables
The following tables show the significant differences of tax compliance of
the respondents as to tax knowledge, tax awareness, tax morale and tax penalty
when grouped according to profile variables.
3.1 Tax Knowledge
Table 4.3.1 illustrates the comparison of the tax compliance of
respondents as to tax knowledge when grouped according to profile variables.
Table 4.3.1
Significant Difference on the Test of Difference on Assessed Tax
Compliance of the Respondents as to Tax Knowledge When
Grouped According to their Profile
Computed
Profile p-value Decision Conclusion
Value
Failed to Not
Age 0.323 1.144 Reject H0 Significant
Sex 0.004 1.591 Reject H0 Significant
Failed to Not
Type of Work 0.690 0.701
Reject H0 Significant
Number of Years as Freelance Failed to Not
Worker 0.201 1.524
Table 4.3.1 presents the summary of computations when testing was done
on the difference that exists between the assessment of the respondents on tax
compliance of the respondents as to tax knowledge when grouped according to
profile. It can be gleaned that when testing was done on the data concerning the
age, type of work, and number of years as freelancer, the researchers
generated
64
p-values that are greater than alpha value of 0.05. The findings means that the
researchers failed to reject the null hypothesis and must conclude that there is
no significant difference between the assessment of the respondents on the
aforementioned parameter when group according to the stated profiling
variables. On the other hand when the test was conducted on the data
concerning the sex of the respondents the result goes the other way around,
thus significant difference was found.
After considering the overall assessment on the tax compliance of the
respondents in terms of tax knowledge when grouped according to profile
variable, the computed value is 4.96 and p-value of 1.22. Furthermore, age, sex,
type of work, and years as freelance worker obtained a p-value of 0.323,
0.004,
0.690 and 0.201 respectively. Since age, type of work and number of years as
freelance worker gained a p-value of greater than 5 percent or 0.05 we have
failed to reject the null hypothesis while sex gained a p-value of less than 5
percent which means that we have rejected the null hypothesis. Therefore, there
is no significant difference in the tax compliance of respondents with regards
to tax knowledge in terms of age, type of work and number of years as freelance
worker, while there is a significant difference in terms of sex.
Jackson and Milliron (1986) state that age, gender, and education, as
major demographic factors, have evidence on their relationship with tax
compliance. They also assert that the age of taxpayers is a common
demographic variable. On the other hand, according to Fischer et al. (1992),
65
demographic variables have an indirect impact on taxpayer compliance
through
66
their effects on noncompliance opportunities and attitudes. However,
some studies have found no link between age and taxpayer compliance.
Furthermore, research by (Preager & Torgler, 2007) and (Mohani, 2001)
discovered that older people are more compliant than young people. Similarly,
studies on the impact of gender on taxpayer compliance yield contradictory
results. According to (Amina & Sniy, 2015) and (Niway, 2016), gender has no
significant impact on taxpayer compliance attitude. It is clear that regardless of
your age, gender, type of work, or number of years working as a freelancer, you
do not have a valid reason to not pay taxes.
3.2 Tax Awareness
respondents as to tax awareness when grouped according to profile variables.
Table 4.3.2
Compliance of the Respondents as to Tax Awareness When
Computed
Value
Failed to Not
Age 0.275 1.309 Reject H0 Significant
Failed to Not
Failed to Not
Worker 0.269 1.317
67
compliance of the respondents as to tax awareness when grouped according to
profile. It can be gleaned that when testing was done across all profiling
variables, the researchers generated p-values that are greater than alpha
value of 0.05. The findings means that the researchers failed to reject the null
hypothesis and must conclude that there is no significant difference between the
assessments of the respondents on the aforementioned parameter when group
according to the stated profiling variables.
After the overall assessment of the tax compliance of the respondents with
regards to tax awareness when grouped according to profile variable was
analysed, the obtained or computed value is 4.363 and p-value of 1.549 which
implies that the null hypothesis was rejected. The age, sex, type of work and
number of years as freelance worker gained a p-value of 0.275, 0.458, 0.550
and
0.269 respectively. Since all the profile variables gained a p-value of greater
than
5 percent or 0.05 we have failed to reject the null hypothesis. Therefore, there is
no significant difference in the tax compliance of respondents with regards to tax
knowledge when grouped to profile variables.
Jatmiko (2006) and Arum (2012) stated that the taxpayer's level of
awareness was a condition in which the taxpayer knew, understood, and
willingly applied the provisions of taxation. The taxpayer's awareness
68
demonstrated his or her understanding of taxation. In contrast, the findings do
not support Wilda's
69
(2015) study, which found that taxpayer awareness was still low, which did not
encourage tax compliance.
On the other hand, Nugroho and Zulaikha (2012) investigated the factors
that influence willingness to pay taxes, with tax awareness as an intervening
variable. The findings revealed that the variables knowledge and
understanding of tax regulations, quality tax services, and perceptions of taxation
effectiveness all have a significant impact on tax awareness.
Moreover, Munari (2005) stated that taxpayers experience awareness
when they: are aware of the existence of tax laws and provisions; are aware
of the function of paying taxes to the state; are aware of the rights and
obligations to be implemented; count, pay, and report voluntarily; and
correctly calculate, pay, and report taxes.
3.3 Tax Morale
respondents as to tax morale when grouped according to profile variables.
70
Table 4.3.3
Compliance of the Respondents as to Tax Morale When
Computed
Value
Failed to Not
Age 0.739 0.303
Failed to Not
Sex 0.829 0.596
Failed to Not
Type of Work 0.292 1.227 Reject H0 Significant
Worker 0.129 1.833
compliance of the respondents as to tax morale when grouped according to
value of 0.05. The researchers failed to reject the null hypothesis meaning there
is no significant differences on the tax compliance of the respondents in terms of
tax morale when grouped according to profile variables.
When the overall of computations was taken into consideration, the
computed value is 3.959 and p-value is 1.989 with an interpretation of not
significant. After the assessment, the researchers found out that sex has the
higher p-value of 0.829 followed by age with 0.739 p-value, then type of
work with p-value of 0.292 and numbers of years as freelance worker has the
lowest p-value of 0.129. Therefore, the researchers conclude that there is no
significant
71
difference between the assessments of the respondents on the tax morale
when group according to the stated profiling variables.
According to the researchers' observations, having a good profile does
not exempt you from tax avoidance or from having a tax morale. Improving
tax morale starts with gaining a better understanding of the factors that influence
taxpayers' perceptions of the tax system and willingness to pay taxes.
Individuals, regardless of their profiles, can be tax morale if they so desire.
However, to improve taxpayer profiles and taxpayer education programs,
as well as to highlight the need for future investigations, particularly on gender
differences in tax morale. People gain more experience with their businesses,
taxes, and tax authorities as they get older, according to Nordblom and amac
(2012).
Furthermore, Alm and Torgler (2006) defined tax morale as 'the intrinsic
motivation to pay taxes.' Tax morale measures an individual's willingness to pay
taxes, that is, 'the moral obligation to pay taxes' or 'the belief that paying taxes
contributes to society' (Torgler, 2007). A moral obligation is a personal norm that
belongs to someone but may not be owned by anyone else. Individuals usually
pay attention to values they believe in when taking action (Dewi, 2016).
3.4 Tax Penalty.
respondents as to tax penalty when grouped according to profile variables.
72
Table 4.3.4
Significant Difference on Assessed Tax Compliance of the Respondents
as to Tax Penalty When Grouped According to their Profile
Computed
Value
Failed to Not
Age 0.665 0.410
Failed to Not
Failed to Not
Worker 0.308 1.220
compliance of the respondents as to tax penalty when grouped according to
value of 0.05.
The accumulated value is 3.712 and p-value is 1.527 after analyzing the
summary of the tax compliance of respondents in terms of tax penalty. Based on
the researchers’ observations assessment of the respondents on tax compliance
of the respondents as to tax penalty when grouped according to profile, age has
the highest p-value of 0.665, followed by number of years as freelance workers
with p-value of 0.308, then sex with 0.287 p-value and type of work has the
lowest p-value of 0.267. The findings means that the researchers failed to reject
the null hypothesis and must conclude that there is no significant difference
73
between the assessment of the respondents on the tax penalty when
group according to the stated profiling variables.
Furthermore, a tax penalty is a punitive measure imposed by the tax
law for the performance of a prohibited act or the failure to perform a required
act, such as failing to timely file a return or filing incorrect or undervalued returns,
among other things. A late filing penalty may be imposed if a taxpayer is
required to file an income or excise tax return and fails to do so on time. The
penalty is 5% of the unpaid tax for each month (or partial month) the return is
late, up to a maximum of 25%. (Legal Dictionary). Taxpayers, on the other hand,
are not always willing or able to comply with the legal obligations that
have been imposed on them.
3.5 Summary of Differences
Table 4.3.5 shows the summary of the significant differences of the
respondents’ tax compliance in terms of tax knowledge, tax awareness,
tax morale and tax penalty when grouped according to profile variable.
74
Table 4.3.5
Summary of Significant Differences of the Tax Compliance of
Respondents when Grouped According to their Profile
Years as
Demographic Profile/ Type of
Variable Age Sex Freelance
Work
Worker
Tax Knowledge NS S NS NS
Tax Awareness NS NS NS NS
Tax Morale NS NS NS NS
Tax Penalty NS NS NS NS
Table 4.3.5 show that there is no significant differences between the tax
compliance of the respondents in terms of its variables when grouped
according to their profile except the tax knowledge in terms of sex. There is a
significant difference between the tax knowledge and respondents’ sex profile.
4. Proposed Extension Program
The researchers conducted the study of the tax compliance of freelance
workers in Lipa City. The researchers came up with results that may be helpful to
the freelance workers in Lipa City after going through the entire process, from
developing the questionnaire to conducting surveys, drawing conclusions,
analyzing and interpreting the acquired data, and providing recommendations.
75
Reference No.: BatStateU- Effectivity Date: Revision No.: 00
FO-ESO-01
Title: EXTENSION ACTIVITY
I. Title of the Project:
“Tax System Knowledge for Freelance Workers: Webinar”
II. Location/ Venue: Batangas State University – Lipa via Zoom App
III. Duration: April 21-22, 2022
IV. Type of Extension Activity:
Tax System Awareness for Freelance Workers Webinar Program
V. Department Involved:
College of Accountancy, Business and Economics, CABE Project
Leader and Coordinators
VI. Cooperating Agencies:
Batangas State University - Lipa Campus
Bureau of Internal Revenue
VII. Beneficiaries: Freelance Workers (e.g. Make-up Artists, IT Specialists,
Freelance Bookkeeper, etc.)
VIII. Total Cost of the Project and Sources of Funds:
The estimated budget needed for this project is Php 14,000. This
includes resource speakers’ honorarium and budget for prizes for
games won by the participants. The budget will be charged to the
possible sponsors.
71
IX. Rationale of the Project:
We are all aware that the main source of income and fund of the
government is from the tax. Despite of the event we are facing as our
economy is at its downfall due to the over demand of Filipinos because
of the pandemic, the rate of people entering freelancing is increasing.
It is concerning to know that most freelance workers are not tax
complying due to some reasons; lack of knowledge with regards to tax
system of the Philippines, low tax morale, and not paying taxes by
choice. With this, the researchers would like to offer webinar program
specifically about tax system of the Philippines and tax laws for self-
employed professionals that will help the beneficiaries to improve their
tax knowledge and tax compliance.
X. Objectives:
The webinar will present information on tax system and its benefits
for the economy and its importance, which will assist the
beneficiaries in tax compliance to BIR and filing their income
tax returns. The participants will gain or extend their tax knowledge
and tax morale. Specifically, the webinar’s objectives are for
beneficiaries:
1. To gain knowledge about tax system of the Philippines.
2. To increase the tax morale of the participants with regards to
paying taxes.
3. To understand the significance of tax compliance to all of us.

72
XI. Description of the Project, Strategies and Methods:
This is a joint undertaking of BatStateU-Lipa (CABE) and Bureau of
Internal Revenue. It is relevant to have knowledge on the Philippine
taxation system especially to the tax rules for freelance workers. It is
important to allot time on learning about the basics of taxation and also
the ways on how to be a registered freelance worker. This will not only
benefit the government but also the citizen of the Philippibes. The
program’s main goal is to spread awareness to participants about the
taxation system here in the Philippines, the freelance tax, and the
importance of considering tax compliance as their responsibility. The
CABE will host a webinar in accordance to the study's objectives.
In order to establish and implement the program, the following activities
involved are:
1. Conceptualization of the Project
2. Meeting with the project leaders and proponents
3. Identification of participants and resource speakers
4. Promote the project through social media info-graphics
5. Preparation of venue via zoom app. Have alternative back-up
plan for possible technical issues
6. Monitoring and Documentation
7. Impact Assessment
73
Flow of the Webinar Program
Webinar Program
9:00 – 9:10 AM Invocation/ Prayer AVP
9:10 – 9:20 AM National Anthem AVP
BatState-U Lipa Hymn &
9:20 – 9:30 AM AVP
Lipa Hymn
Dr. Monetter M. Soquiat
9:30 – 9:45 AM Opening Remarks
(CABE, College Dean)
9:45 – 10:15 AM Atty. Alvin De Silva
Inspirational Message (Chancellor)
10:15 – 10:30 AM Introduction of Speakers Ms. Krystel Mae S. Jaen
Philippine Taxation (Tax
10:30 – 11:30 AM system, Tax rate, First Speaker
Importance, etc)
11:30 AM – Games/ Activities with
prizes Participants/Speaker
12:00 PM
12:00 – 1:00 PM Lunch Break
Freelance Tax (Meaning,
1:00 – 1:30 PM Purpose, Importance, Second Speaker
Benefits, etc)
1:30 – 2:00 PM Games/ Activities with Participants/ Speaker
prizes
2:00 – 2:30 PM Tax Compliance (Ways on Third Speaker
how to comply with tax
rules, Importance,
Benefits, etc)
2:30 – 3:00 PM Games/ Activities with Participants/ Speaker
prizes
3:00 – 3:45 PM Awarding of Certification Dr. Monette M. Soquiat
for the Speakers and Mr. Rey Anthony N.
giving prizes for the winner Abing
of the games. Ms. Nelsie P. Malibiran
3:45 – 4:00 PM Closing Remarks Mr. Rey Anthony N.
Abing
74
XII. Financial Plan:
Particulars Quantity Unit Amount Total
Resource Speaker 3 3,000.00 9,000.00

Honorarium
Prizes 25 pcs. 200.00 5,000.00
Total 14,000.00
XIII. Functional Relationship with the Collaborating Agencies:
The BatStateU Lipa Extension Service Office will work with the Bureau
of Internal Revenue to provide for resource speakers to deliver lectures
to the participants.
XIV. Monitoring and Evaluation Mechanics / Plan:
To monitor the effectiveness of the project, the BatStateU-Lipa

(CABE)
should have the following:
1. Registration Copy/Attendance Sheet
2. Accomplished training assessment/evaluation survey
3. Narrative Reports and Photo Documentations
XV. Plans for Ensuring the sustainability of the Project:
To monitor the webinar program sustainability, specified below must be
considered:
1. Clear communication between the researchers and the
75
beneficiaries must be ensured.
2. Concerns of the participants must be redirected to collaborating
agencies for guaranteed valuable response.
3. Have a variety of financing sources so that the project can
continue with different speakers who have specific experience in
the Philippines' tax system..
Prepared By: Reviewed By:
Recommending Approval: Approved:
Required Attachment: If Extension Service / Training is requested by clients,

attach the letter of request with endorsement from the University
President. Cc: (1) College Dean
76
Chapter V
SUMMARY OF FINDINGS, CONCLUSION, IMPLICATION
This chapter presents the summary of the study; findings, conclusions
and recommendation which were drawn after the researchers obtain the result
based on the gathered data.
Summary
The purpose of the study was to assess the tax compliance among
freelance workers in Lipa City. It specifically covered the profile of the
respondents in terms of age, sex, type of work and years as freelance
worker and the tax compliance in terms of tax knowledge, tax awareness, tax
morale and tax penalty. This study aimed to find out if there is any significant
difference between the tax compliance of the respondents when grouped
according to profile variables so as the proposed program.
The researchers used the descriptive type of research method in
assessing the tax compliance among freelance workers. This type of research
was very applicable to use because its design gives better understanding
regarding the occurrence of the study. Scaled questionnaire was used to gather
important data needed. It was given to some selected freelance worker of the
researchers. Every response was tallied and classified accordingly; percentage,
weighted mean and ANOVA test were used.
Findings
After the careful analysis and interpretation of data, the following findings
were revealed.
77
1. Demographic profile of the freelance workers was identified and that most
of the freelance worker in Lipa City were under the age of 18-35 years old
which was 79 percent of the total respondents. In addition,
freelancers were mostly male with the biggest percentage of 52. Most of
the respondents are in the customer service field that contribute to 26
percent Result also revealed that freelancers works for less than 1 year
which is
42 percent of the total.
2. The variables such as tax knowledge, tax awareness, tax morale, and tax
penalty were used to assess the tax compliance of freelance workers.
Almost all the items in each variable were verbally interpreted as agree or
compliant. Tax Knowledge, tax awareness, tax morale and tax penalty
obtained composite mean of 3.20, 2.86, 2.79 and 2.84 respectively.
3. The comparison of respondent’s tax compliance when freelance workers’
tax knowledge are grouped according to profile, type of work got the
highest p-value of 0.690. When freelance workers’ tax awareness are
grouped according to profile, type of work got the highest p-value of 0.550.
When freelance workers’ tax morale are grouped according to profile, sex
got the highest p-value of 0.829. When freelance workers’ tax penalty are
grouped according to profile, age got the highest p-value of 0.665.
4. Based on the result of the study, the researchers proposed a tax
compliance extension program for freelance workers to be more compliant
and for them be more knowledgeable.
78
This department of college may conduct an extension program
regarding webinar that discusses the purpose and importance of taxation.
The webinar will highlight the Philippine taxation systems that will raise
awareness to freelance workers for them to be strongly aware and highly
compliant.
Conclusion
Based on the findings the following conclusions were drawn:
1. Majority of the respondents are male who are in the age of 18 to 35 years,
working as a customer service for less than 1 year.
2. In terms of the variables of tax knowledge, tax awareness, tax morale, and
finally, tax penalty, the assessment of tax compliance of freelancing
workers was found to be compliant.
3. Researchers found out that the comparison of respondent’s tax
compliance when the tax knowledge of freelance workers in Lipa City are
grouped according to profile, age, type of work and number of years as
freelance workers is not significant while sex is significant. When freelance
workers’ tax awareness are grouped according to profile, age, sex, type of
work and number of years as freelance workers is not significant. When
freelance workers’ tax morale are grouped according to profile, age, sex,
type of work and number of years as freelance workers is not significant.
When freelance workers’ tax penalty are grouped according to profile,
age, sex, type of work and number of years as freelance workers is not
significant.
79
4. Based on the results of the study, one feasible course of action is to
implement tax compliance extension programs in Lipa City regarding
webinar about taxation to help freelancers become highly compliant and
highly aware.
Recommendation
Based on the findings and conclusion, the following recommendations
are hereby given:
1. The researchers recommend all freelance workers have a basic
understanding of tax accounting because it is vital for freelancing jobs or
freelance firms, to reduce the cost of hiring tax professionals. Learning
basic accounting and filing tax returns is also important because
freelancing workers must understand their revenue and finances. In
general, having tax expertise in both areas is necessary for rendering
services or running a firm.
2. Freelance workers should think of paying taxes as a responsibility rather
than an obligation, according to the researchers. The result can also be
used as background information to remind people that there are tax
laws in place and that they should be familiar with tax procedures in order
to reduce the rate of non-compliance with tax obligations.
3. The researchers encourage the unregistered freelance workers especially
those whose earnings are taxable to register in the Bureau of Internal
Revenue to increase the tax compliance and to help increase the
economy of the Philippines.
80
4. The researchers suggest to themselves that they put on a public
program to share the study's findings. Its purpose is to educate people
about the importance of tax compliance in supporting the economy.
5. The researchers suggest that future studies investigate tax compliance
among freelance workers by creating questionnaires based on various
claims or theories. In addition, the researchers suggest that freelance
workers be evaluated using a variety of variables. Other theoretical
frameworks can be used to do this. Another technique to analyze a
freelancer's tax compliance is to conduct an actual interview as a method
of data collection. The concepts offered could be used as a helpful source
of information for future research. The study's conclusions and findings
would give them with extra information and an overview of the subject.
81
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APPENDICES
LETTER OF REQUEST
Republic of the Philippines
BATANGAS STATE UNIVERSITY LIPA
COLLEGE OF ACCOUNTANCY, BUSINESS AND ECONOMICS
Marawoy, Lipa City
Tel. No. (043)980-0385/87 || E-mail [email protected]
October 27, 2021
Dear Sir/Ma’am,
Greetings of Peace and Benevolence!
We, the 4 th year Bachelor of Science in Management Accounting, students of Batangas

State University Lipa, are currently conducting our thesis study entitled “Tax Compliance
of Freelance Workers in Lipa City” as part of the requirements for our degree.
In line with this, we are humbly asking for your time to answer our survey questionnaire.
Your comprehensive response will be of great help in achieving the goal of our study.
Rest assured that all information that you have entrusted to us will be treated with utmost
confidentiality and will be used for academic purposes alone.
We are looking forward to your kind consideration upon this humble request. Thank you!
In spirit of excellence,
Kristel Joy P. Dece

na
tel Mae S. Jae
Krys n
Ma. Cristina L. Ramirez
Noted by,
Mr. Rey Anthony Abing

Research Adviser
RESEARCH
INSTRUMENT
Marawoy, Lipa City
Name (Optional):
I. Profile of the Respondents. Please check the appropriate choice to reflect your
personal profile.
Age Sex
[ ] 18 – 35 years old [ ] Male
[ ] 36 – 55 years old [ ] Female
[ ] 56 years old and above
Type of Work Years as Freelance Worker

[ ] Accounting & Finance [ ] less than 1 year
[ ] Administrative [ ] 1 – 3 years
[ ] Writing [ ] 4 – 6 years
[ ] Customer Service [ ] 7 – 10 years
[ ] Computer & IT [ ] 11 years or more
[ ] Medical & Health
[ ] Editing
[ ] HR & Recruiting
[ ] Education & Training
II. Tax Compliance. Please read the following statements about tax and put a check
on the choice that applies most closely to you. Use the rating scale to give your
response.
4 – STRONGLY AGREE
3 – AGREE
2 – DISAGREE
1 – STRONGLY DISAGREE
Tax Knowledge – this refers to the understanding of how

the tax system works and the requirements for filing the tax 4 3 2 1
form.
1. I understand tax rules.
2. I know the procedures on how to pay tax.
3. I recognize the purpose and implication of tax.
4. I understand the meaning and basis of the Philippine tax
system.
5. I am familiar with the basics of accounting and taxation.

Marawoy, Lipa City
Tax Awareness – refers to your understanding of

various tax forms, how they are paid, taxpayer rights, 4 3 2 1
and how to handle the appeals process
6. I am aware that all my income is taxable.
7. I file my income tax for self-employed
professional/ freelance workers.
8. I am mindful of my rights as a taxpayer.
9. I am aware of tax rates that can be applied to my
income.
10. I compute my own tax.
Tax Morale – refers to the taxpayer’s perceptions

4 3 2 1
and attitudes towards paying and evading taxes
11. I honestly declare my earnings for tax return.
12. I detest tax evasion.
13. I am transparent about my income.
14. I pay income tax even if the tax rate is high.
15. I am anxious about declaring false income.
Tax Penalty – refers to a punitive measure that the

law imposes for the performance of an act that is
prescribed, or for the failure to perform a required 4 3 2 1
act
16. I am paying income tax on time to prevent the
tax penalty.
17. I recognize the need to settle tax deficiencies
within the specified time.
18. I am aware of the imposed tax penalties of the
tax system in the Philippines.
19. I comply with all requirements to avoid tax
penalties.
20. I know the tax penalties that can be applied to
me.
Batangas State University – lipa city
Barangay Marawoy, Lipa City
Minutes of the Defense
Date: June 3, 2021
Time: 8:00 am
Place: Virtual Set- Up
Attendees: Dr. Monette M. Soquiat- Panel Chairperson
Mr. Ronie A. Mendoza– Panel Member
Ms. Nelsie Malibiran– Panel Member
Sir Rey Anthony N. Abing – Thesis Adviser
Ms. Krystel Mae S. Jaen– Researcher
Ms. Maria Cristina Ramirez– Researcher
Ms. Kristel Joy P. Decena– Researcher
▪ The defense immediately started at 8:00 and ended at 9:00 AM
▪ The researchers presented their proposed topic.
▪ The panel asked the researchers why they choose their topic.
▪ Here are some comments and suggestions made by the panel:

CHAPTER 1
• Change the title to tax compliance of freelance workers at Lipa City
• Change the theoretical framework
CHAPTER 3
• Simple Random Sampling will be use as a statistical data to gather number of
respondents
• The number of respondents would be 100
Prepared by:
MS. KRISTEL JOY P. DECENA
Group Representative
Noted by:
REY ANTHONY N. ABING, MBA

Adviser
CURRICULUM
VITAE
KRYSTEL MAE S. JAEN
Zone 5, Carnelian Street, Pangao, Lipa City, Batangas 4217
 [email protected]
 +63948-811-0866
CAREER OBJECTIVE: PERSONAL INFORMATION:

To secure a challenging and rewarding Date of Birth : December 21,1999
position within the private sector where prior Gender : Female
experience, personal ability, and a commitment Age : 21 years old
to professionalism would be of value. Position Citizenship : Filipino
should allow for continued personal and Civil Status : Single
professional growth commensurate with Religion : Roman Catholic
achievements. Nationlality : Filipino
EDUCATIONAL ATTAINMENT: SEMINAR:

Secondary Career and Employment Coaching Seminar
Senior High School AMA Computer College – Lipa Campus
AMA Computer College Lipa Senior High October 11, 2017
Ayala Highway Balintawak, Lipa City SKILLS:
Accountancy, Business and Management • Well-developed oral and written
S.Y. 2017-2018 communication skills
• Has a high level of creativity and
Junior High School resourcefulness, combined with strong
Lodlod National High School planning and organization and prioritization
Lodlod, Lipa City skills
S.Y. 2015-2016 • Has good leadership skills
Primary • Proficient in using Computer Application
Pangao Elementary School such as: Microsoft Word, Excel, Publisher
Pangao, Lipa City and Power point
S.Y. 2011-2012 • Tolerant and flexible, adjusts to different
situations.
CERTIFICATION • Passionate
Passer - National Certification III in CHARACTER REFERENCE:
Bookkeeping - December 17, 2019 - Diane Mari Silang
December 16, 2024
Teacher
 +63915-722-2481
I hereby certify that the above
information is true and correct to the best of Arlene Maigue
my knowledge and belief. Councilor
 +63918-216-0504
KRYSTEL MAE S. JAEN Mrs. Gemma R. Tada

Applicant’s Signature
Business Woman
 +63921-778-6907
MARIA CRISTINA L. RAMIREZ
#200 Paninsingin Tambo, Lipa City
 [email protected]
 +639454626641
CAREER OBJECTIVE: : PERSONAL INFORMATION:
Age: 21
A successful-driven and goal-
Civil Status: Single
oriented person who aims to obtain a
Date Of Birth: March 28,2000
position that will enhance my skills and
Gender: Female
knowledge, professionally. Build the
Religion: Roman Catholic
success of the company/firm by working
Nationality: Filipino
diligently and experience self-growth at the
same time.
SKILLS:
EDUCATIONAL ATTAINMENT:
• Time management
College
• Speaking and writing in English and
Batangas State University Filipino
Marauoy, Lipa City • Critical Thinking
BS Management Accounting • Complex problem solving
Undergraduate
Secondary Activities
2018 Year
High school graduate, THE LIPA GRACE • Self- Esteem: An Asset to Success
ACADEMY Certification - Seminar – 2016
Grade 7 – Achiever • Student – Leaders of Grace: Lead Like
Best in Visual Arts Jesus – Team Building - 2016
• 1st Lipa Performing Arts Convention Arts
3rd Place – Science Quiz Bee and Artists in Contemporary Society –
Board Member – Commission on Elections Seminar - 2017
Grade 12 – With High Honor • Embracing Leadership through Unity –
Team Building – 2019
CERTIFICATION • Nexus MMXIX: Together Towards
Tomorrow – Team Building – 2019
Passer - National Certification III in
Bookkeeping - December 17, 2019 - CHARACTER REFERENCE:
December 16, 2024
I hereby certify that the above MR. ARNOLD Q. MALALUAN

information is true and correct to the
best of my knowledge and belief. Professor, CABE Department
Batangas State University Lipa Campus
|+63(43)4257158
Ma. Cristina Ramirez
KRISTEL JOY P. DECENA
Brgy kayumanggi Lipa City
[email protected]
09752365085
CAREER OBJECTIVE: : PERSONAL INFORMATION:
Age: 23
To build a career in a growing
Civil Status: Single
organization when I can get the opportunities
to prove my abilities by accepting challenges, Date Of Birth: November 05,1998
fulfilling the organizational good and climb Gender: Female
the career ladder to continuous learning and Religion: Roman Catholic
commitment. Nationality: Filipino
EDUCATIONAL ATTAINMENT:
College SKILLS:
Batangas State University • Computer Literate
Marauoy, Lipa City • Decision making
BS Management Accounting • Time Management
Undergraduate • Cooperation
• Stocks and Inventory Management
Secondary:
• Interpersonal Skills
Senior Highschool: • Mentorship
Royal British College • Conflict Resolution
Accounting And Business Management
2016-2018
Junior Highschool: Activities
Lipa City National High School
B. Morada Avenue , Lipa City • Embracing Leadership through Unity –
2015-2016 Team Building – 2019
Primary : • Nexus MMXIX: Together Towards
Tomorrow – Team Building – 2019
Kayumanggi Elementary School
Kayumanggi Lipa City CHARACTER REFERENCE:
2009-2010
CERTIFICATION MR. ARNOLD Q. MALALUAN
Passer - National Certification III in Professor, CABE Department
Bookkeeping - December 17, 2019 - Batangas State University Lipa Campus
December 16, 2024 +63(43)4257158
I hereby certify that the above information Aileen A. Melo

is true and correct to the best of my OIC, Greenwich Recto LIpa
knowledge and belief. Pag-olingin Lipa City
0916-938-9628
Kristel Joy P. Decena
COMPUTATION OF
DATA
“Tax Compliance of Freelance Workers in Lipa City”
Research Instrument
In the constructed questionnaire, the respondents were requested to rate each item
on a four (4) point rating scale with their designated verbal interpretation.
Numerical Rating Value Verbal Interpretation
4 Strongly Agree
3 Agree
2 Disagree
1 Strongly Disagree
To interpret the weighted mean and composite mean of the assessment on the tax
compliance of freelance workers in Lipa City, the following numerical values and their
corresponding verbal interpretation were used:
Mean Ranges Verbal Interpretation
3.50 – 4.00 Strongly Agree / Highly Compliant
2.50 – 3.49 Agree / Compliant
1.50 – 2.49 Disagree / Moderately Compliant
1.00 – 1.49 Strongly Disagree / Not Compliant
Statistical Treatment
• Frequency and Percentage – used to describe the profile of the respondents.
• Weighted Mean – used to determine the respondents’ assessment on tax compliance of
freelance workers in Lipa City.
• T-test / Analysis of Variance (ANOVA) - used to test the difference between the
assessed tax compliance of freelance workers in Lipa City when grouped according to
their profile.
1. What are the profiles of the respondents in terms of:

1.1 age;
1.2 sex;
1.3 type of work; and
1.4 years as freelance worker
Table 1
Distribution of the Respondents in terms of Age
Age Frequency Percentage
18 – 35 years old 79 79
36 – 55 years old 18 18
55 years old and above 3 3
TOTAL 100 100
Table 2
Distribution of the Respondents in terms of Sex
Sex Frequency Percentage
Male 52 52
Female 48 48
TOTAL 100 100
Table 3
Distribution of the Respondents in terms of Type of Work
Type of Work Frequency Percentage
Accounting and Finance 12 12

Administrative Writing 6 6
Customer Service 6 6
Computer and IT 26 26
Medical and Health 19 19
Editing 4 4
HR and recruiting 12 12
Education and Training 6 6
Others 9 9
0 0
TOTAL 100 100
Table 4
Distribution of the Respondents in terms of
Number of Years as a Freelance Worker
Number of Years as a Frequency Percentage

Freelance Worker
Less than a year 42 42
1 – 3 years 35 35
4 – 6 years 17 17
7 – 10 years 2 2
More than 10 years 4 4
TOTAL 100 100
2. How do respondents determine their compliance in terms of:

2.1 tax knowledge;
2.2 tax awareness
2.3 tax morale; and
2.4 tax penalty?
Table 5
Assessment on Tax Compliance of Freelance Workers
in terms of Tax Knowledge
Weighted
STATEMENT Interpretation
Mean
1. I can understand and interpret the tax rules. 3.25 Agree
2. I know how the procedure for paying taxes. 3.11 Agree
3. I know the function and benefits of the Tax
3.27 Agree
Identification Number.
4. I know the tax collection, the basis of tax
collection and may or not the taxpayer pay it in 3.28 Agree
installments.
5. I know the basic of accountancy and recording,
3.07 Agree
which must be done by taxpayers in general.
Table 6
in terms of Tax Awareness
Weighted
Mean
1. I am transparent to my income. 2.99 Agree
2. I file income tax for self-employed professional/
2.82 Agree
freelance workers.
3. I pay income tax even though tax rates changes. 2.94 Agree
4. I pay tax even though I am not tax aware. 2.85 Agree
5. I pay income tax as freelance worker and
2.68 Agree
considered it as responsibility.
Table 7
in terms of Tax Morale
Weighted
Mean
1. I honestly declare earnings in my tax returns. 2.76 Agree
2. Evading tax have never come into my mind. 2.77 Agree
3. Tax compliance is a social norm. 2.89 Agree
4. My credentials and personal connections don’t
2.77 Agree
give me the right to evade tax.
5. False income declaration will generate anxiety,
2.77 Agree
guilt and shame to me.
Table 8
in terms of Tax Penalty
Weighted
Mean
1. I am paying income tax on time to prevent tax
2.84 Agree
penalty.
2. I pay the shortfall tax within the time frame
2.77 Agree
specified in the notice.
3. I am aware to the imposed tax penalties of the tax
2.88 Agree
system of the Philippines.
4. Tax penalties affects my tax compliance due to
2.82 Agree
the penalty rate.
5. I am paying income tax to lessen the hassle of
2.91 Agree
paying tax penalty.
3. Is there any significant difference on the tax compliance of the respondents when
grouped according to their profile variables?
Table 9
Summary of Computations on the Test of Difference on Assessed Tax Compliance

of the Respondents as to Tax Knowledge When Grouped According to their Profile
Computed
Value
Failed to
Age 0.323 1.144 Not Significant
Reject H0
Failed to
Type of Work 0.690 0.701 Not Significant
Reject H0
Number of Years as Failed to
0.201 1.524 Not Significant
Freelance Worker Reject H0
Note: Reject H0 if p-value is lesser than alpha α =
0.05.
Table 9 presents the summary of computations when testing was done on the
difference that exists between the assessment of the respondents on tax compliance of the
respondents as to tax knowledge when grouped according to profile. It can be gleaned
that when testing was done on the data concerning the age, type of work, and number of
years as freelancer, the researchers generated p-values that are greater than alpha value of
0.05. The findings means that the researchers failed to reject the null hypothesis and must
conclude that there is no significant difference between the assessment of the respondents
on the aforementioned parameter when group according to the stated profiling variables.
On the other hand when the test was conducted on the data concerning the sex of the
respondents the result goes the other way around, thus significant difference was found.
Table 10

of the Respondents as to Tax Awareness When Grouped According to their Profile
Computed
Value
Failed to
Reject H0
Failed to
Sex 0.458 0.873 Not Significant
Reject H0
Failed to
Reject H0
Note: Reject H0 if p-value is lesser than alpha α = 0.05.
respondents as to tax awareness when grouped according to profile. It can be gleaned that
when testing was done across all profiling variables, the researchers generated p-values
that are greater than alpha value of 0.05. The findings means that the researchers failed to
reject the null hypothesis and must conclude that there is no significant difference
between the assessment of the respondents on the aforementioned parameter when group
Table 11

of the Respondents as to Tax Morale When Grouped According to their Profile
Computed
Value
Failed to
Reject H0
Failed to
Reject H0
Failed to
Reject H0
respondents as to tax morale when grouped according to profile. It can be gleaned that
Table 12

of the Respondents as to Tax Penalty When Grouped According to their Profile
Computed
Value
Failed to
Reject H0
Failed to
Reject H0
Failed to
Reject H0
respondents as to tax penalty when grouped according to profile. It can be gleaned that
COMPUTATIONS (For Appendix)
Summary of Responses on Tax Knowledge
Total Weighte
Question d Mean Verbal
x1 x2 X3 X4 Response
No. Interpretation
s
1 9 9 30 52 100 3.25 Agree
2 8 15 35 42 100 3.11 Agree
3 7 7 38 48 100 3.27 Agree
4 7 5 41 47 100 3.28 Agree
5 10 16 31 43 100 3.07 Agree
Summary of Responses on Tax Awareness
Total Weighte
No. Interpretation
s
1 12 11 43 34 100 2.99 Agree
2 18 9 46 27 100 2.82 Agree
3 14 7 50 29 100 2.94 Agree
4 13 14 48 25 100 2.85 Agree
5 19 16 43 22 100 2.68 Agree
Summary of Responses on Tax Morale
Total Weighte
No. Interpretation
s
1 18 9 52 21 100 2.76 Agree
2 19 8 50 23 100 2.77 Agree
3 16 6 51 27 100 2.89 Agree
4 19 7 52 22 100 2.77 Agree
5 17 13 46 24 100 2.77 Agree
Summary of Responses on Tax Penalty
Total Weighte
No. Interpretation
s
1 18 7 48 27 100 2.84 Agree
2 17 11 50 22 100 2.77 Agree
3 14 8 54 24 100 2.88 Agree
4 17 10 47 26 100 2.82 Agree
5 14 8 51 27 100 2.91 Agree
Oneway (AGE)
ANOVA
Sum of Mean
Squares df Square F Sig.
KNOWLEDGE Between Groups 1.700 2 .850 1.144 .323
Within Groups 72.059 97 .743
Total 73.758 99
AWARENESS Between Groups 2.060 2 1.030 1.309 .275
Total 78.406 99
MORALE Between Groups .547 2 .273 .303 .739
Total 87.994 99
PENALTY Between Groups .697 2 .349 .410 .665
Total 83.166 99
T-Test (SEX)
Independent Samples Test
Levene's
Test for
Equality of
Variances t-test for Equality of Means
95%
Std. Confidence
Sig. Mean Error Interval of the
(2- Differen Differen Difference
F Sig. t df tailed) ce ce Lower Upper
KNOWLEDG Equal variances 8.471 .004 1.591 98 .115 .27276 .17145 - .61299
E assumed .06748
Equal variances 1.562 76.84 .122 .27276 .17461 - .62046
not assumed 2 .07495
AWARENES Equal variances .556 .458 .873 98 .385 .15577 .17834 - .50969
S assumed .19815
Equal variances .871 95.81 .386 .15577 .17885 - .51079
MORALE Equal variances .047 .829 .596 98 .553 .11282 .18932 - .48853
assumed .26289
Equal variances .596 97.18 .553 .11282 .18940 - .48873
PENALTY Equal variances 1.145 .287 .809 98 .420 .14872 .18378 - .51342
assumed .21598
Equal variances .806 94.82 .422 .14872 .18454 - .51509
Oneway (TYPEW OF WORK)
ANOVA
Sum of Mean
KNOWLEDGE Between Groups 4.281 8 .535 .701 .690
Total 73.758 99
AWARENESS Between Groups 5.534 8 .692 .864 .550
Total 78.406 99
MORALE Between Groups 8.569 8 1.071 1.227 .292
Total 87.994 99
PENALTY Between Groups 8.373 8 1.047 1.273 .267
Total 83.166 99
Oneway (NUMBER OF YEARS AS FREELANCER)

ANOVA
Sum of Mean
KNOWLEDGE Between Groups 4.448 4 1.112 1.524 .201
Total 73.758 99
AWARENESS Between Groups 4.120 4 1.030 1.317 .269
Total 78.406 99
MORALE Between Groups 6.305 4 1.576 1.833 .129
Total 87.994 99
PENALTY Between Groups 4.063 4 1.016 1.220 .308
Total 83.166 99

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Tax Compliance of Freelance Workers in Lipa City

In Partial Fulfillment of the Requirements for the Degree

REY ANTHONY N. ABING, MBA

Approved by the Committee on Oral Examination with the grade of_

MONETTE SOQUIAT Ph.D.

NELSIE MALIBIRAN, MBA RONIE A. MENDOZA, MS MATH

Accepted and approved in partial fulfilment of the requirements for the

Date MONETTE SOQUIAT Ph.D.

The researchers are profoundly beholden to the compassionate people

support of the following:

To Batangas State University, for giving the researchers the opportunity to

learn through the quality education it provides.

their suggestions to further improve this study.

for the questionnaire.

serving as the subject of the study.

prodigious time, effort and strength to accomplish this task.

guided them to the right things for their benefits.

With much gratitude from all the researchers’ heart!

II. REVIEW OF RELATED LITERATURE

IV. PRESENTATION, ANALYSIS AND CONCLUSION OF DATA

Table Title Page

Figure Title Page

Figure 1 Theory of Planned Behavior. . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Figure 2 Conceptual Paradigm of the Study. . . . . . . . . . . . . . . . . . . . . . 8

This study was designed to determine the tax compliance of freelance

This utilized as a major instrument in gathering adequate and necessary data.

mean and anova.

Meanwhile, the variables such as tax knowledge, tax awareness, tax

knowledge in which there is a significant difference when grouped according to

The researchers suggest establishing an extension program about a

spending time to study and understand what taxation is all about.

Further, the researchers also recommend that future researchers may

conduct a similar study or related to the present study in business and

management area. They may use this study as a reference.

KEY WORDS: Tax Knowledge, Freelance Workers, Tax Knowledge, Tax

Awareness, Tax Morale, Tax Penalty

background, theoretical and conceptual framework, research hypothesis,

significance of the study, scope and limitation, and definition of terms.

freelancing has been increasing. Coronavirus pandemic has caused a great

question is, are freelance workers a tax compliant?

Freelance workers are self-employed people who are not generally

dependent on a single employer on a long-term basis (Investopedia, 2020).

Freelance workers are typically considered independent contractors and can

work on contractual full-time or as a second job to complement full-time jobs as

time allows. A freelance worker typically works in the artistic, professional, or

service industries, such as filmmaking, painting, architecture, publishing,

copywriting, media, marketing, music, acting, journalism, etc. A web designer or

to another client is an example of a freelance job.

sustainability. Taxation and individual tax compliance study is beneficial to

citizens, policymakers, academics, and the government on economic, political,

and social levels. A tax is a mandatory levy imposed by a constituted authority on

an individual's income or the profits of a business company. It is a method for

citizens to contribute to and supplement the expense of governance (Adekoya,

government. It is a give and take relationship wherein people contribute a portion

of their income to the government in exchange of projects like building of

infrastructure and/or financial support to their people.

Workers who are considered self-employed must pay the self-employment

tax. Sole proprietors, freelancers, and independent contractors who operate a

regard a member of a partnership who engages in a trade or company to be