The Role of Information Technology Usage on Startup Financial Management and Taxation

The level of participation of taxpayers, particularly Startups in Indonesia, is still low. According to Directorate General of Taxes, two things at least cause the low rate: first is the high turnover rate of Startup; second is the low rate of financial literacy, which correlates with tax administration. Consequently, having good financial governance is a must. Furthermore, technology may significantly help startups in systematizing their financial governance activity; while at the same time may help the startup to progress. The purpose of this study was to investigate the role of the use of information technology on Startup financial governance and taxation. Data were collected through a survey conducted in Yogyakarta using 37 respondent who are small business or startups. A researcher administered questionnaire survey method was used for data collection. The results reveal that many startups have used technology for financial governance the use of technology as part of digital transformation such as paperless accounting or digitalizing documents previously were done manually, such as making invoices and other matters related to recording. Startup widely uses cloud-based applications. More than half of startups that conduct financial governance utilize internet-based applications or cloud computing. The applications used by startups are limited to recording transactions, but none of the startups have utilized the taxation application, especially for Final Income Tax for Startups. These finding can enable policymakers to develop information system which can use as financial governance and managing taxation simultaneously. (C) 2019 The Authors. Published by Elsevier B.V.