West Science Law and Human Rights Vol.
No.
October 2023, pp.
Legal Analysis Related to Depreciation of Assets and Tax Liabilities of Fabric Shops in Cipadu Market.
Tangerang Bakhrudin1.
Fahmi Ihsan Margolang2
1Universitas Subang
2Universitas Islam Negeri Sunan Gunung Djati
Article Info
ABSTRACT
Article history:
The fabric industry, a vital economic driver, relies on numerous small fabric shops to serve local communities and the broader textile supply However, the complexities of managing asset depreciation and tax liability within these businesses are often underestimated.
This research delves into the legal framework surrounding asset depreciation and tax liability as they pertain to fabric shops in Cipadu Market.
Tangerang.
Indonesia.
By combining a mixed-methods approach involving surveys, interviews, and observations, this study investigates current practices, awareness of tax regulations, challenges faced, and opportunities for tax optimization among fabric shop The results reveal a varied landscape where fabric shop owners predominantly employ the straight-line depreciation method and exhibit a reasonably high level of tax compliance.
However, there exists a knowledge gap concerning specific tax incentives and a need for improved asset tracking and documentation practices.
Moreover, a lack of financial expertise hampers the full utilization of tax optimization strategies.
The study's findings offer valuable insights that extend beyond Cipadu Market and are applicable to small businesses in Indonesia and other emerging economies, emphasizing the importance of educational initiatives, simplified tax laws, and financial support for enhancing financial sustainability and compliance with the law.
Received October 2023 Revised October 2023 Accepted October 2023 Keywords:
Legal Analysis Depreciation of Assets Tax Liabilities Fabric Shops This is an open access article under the CC BY-SA license.
Corresponding Author:
Name: Bakhrudin Institution Address: Universitas Subang e-mail: bakhrudin@gmail.
INTRODUCTION
The fabric industry has long been a Importance cornerstone of the global economy, supplying providing opportunities for entrepreneurs textiles for clothing, home furnishings, and .
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Other results focus on specific various other products.
Within this industry, industries, such as the fashion industry .
, small fabric shops play a vital role in .
, and the home-garden agroforestry system supplying materials for local communities, .
One study examines the potential economic impact of renewable and non- providing opportunities for entrepreneurs.
renewable energy technologies on small Journal homepage: https://wsj.
westscience-press.
com/index.
php/wslhr A West Science Law and Human Rights businesses in South Africa .
Another study enterprises (MSME.
in Surakarta City.
Central Java, the level of compliance of corporations, using Starbucks as a case study.
MSMEs to fulfil the obligation to pay income in the context of international relations .
Ae tax was still low .
The study found that .
Overall, the search results suggest that factors that influence compliance of MSMEs small businesses play a vital role in economic to pay income tax are largely due to the fact MSMEs entrepreneurship is necessary for creating government provisions regarding income tax new organizations and businesses .
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MSME financial capacities are However, the intricacies of managing still small, and they do not feel the benefits of these businesses, particularly in the context of tax payments to support the progress of their asset depreciation and tax liability, are often businesses .
This research delves into the To minimize tax liability, fabric shops legal aspects surrounding asset depreciation in Indonesia can consider the following and tax liability as they relate to fabric shops Keeping accurate records of all Tangerang, business transactions can help fabric shops to Indonesia.
It aims to provide a comprehensive claim all eligible deductions and credits, which can reduce their taxable income.
The governing these critical financial aspects.
Indonesian government offers various tax ensuring that fabric shop owners can navigate incentives to small businesses, including the complexities of asset management and fabric shops.
For example, the government taxation with greater clarity.
provides tax exemptions for small businesses Cipadu Market.
The challenge for small businesses in Pasar Cipadu is to manage their assets with annual revenues of up to IDR 4.
8 billion .
efficiently and comply with tax regulations Consulting with a tax professional that are subject to change and complex to can help fabric shops to understand their tax Large companies often have the obligations and identify opportunities to resources and expertise to manage this minimize their tax complexity effectively, but small businesses software can help fabric shops to accurately such as fabric shops in Pasar Cipadu may face calculate their tax liability and identify hurdles in doing so .
The study on the deductions and credits that they may be analysis of the application of accounting in eligible for.
Using tax cloth shop businesses in Pasar Bawah This research delves into the legal Pekanbaru shows that small cloth shop aspects surrounding asset depreciation and businesses in the market still do not apply tax liability as they relate to fabric shops basic accounting concepts, so there is a need for assistance to small business actors in Indonesia.
It aims to provide a comprehensive making good financial reports .
, .
Cipadu Market.
Tangerang.
Tax liability is a significant concern governing these critical financial aspects, for small businesses in Indonesia, including ensuring that fabric shop owners can navigate fabric shops.
According to a study on the level the complexities of asset management and of voluntary compliance of income tax taxation with greater clarity.
payments in micro, small, and medium Vol.
No.
October 2023: pp.
West Science Law and Human Rights emphasize the importance of record-keeping.
LITERATURE REVIEW 1 Asset Depreciation in Small Businesses Asset depreciation, in the context of regulations to avoid penalties and legal business, refers to the systematic allocation of the cost of a tangible asset over its useful life.
remaining compliant is a delicate balance.
The It is a fundamental accounting concept that literature discusses strategies such as tax impacts a business's financial statements, deductions, credits, and incentives available profitability, and taxation.
Small businesses, to small businesses .
, .
Maximizing including fabric shops, often face unique these opportunities can lead to substantial savings, but it requires a comprehensive .
Ae.
Optimizing understanding of tax laws .
, .
Small depreciation methods are employed by businesses, such as straight-line depreciation, challenges in managing tax liability, such as declining balance depreciation, and units-of- limited resources for tax planning and production depreciation.
Each method has its Research highlights the necessity advantages and implications for tax liability.
for simplified tax laws, educational resources.
Small businesses need to choose the method and accounting support to help small that best suits their financial goals and business owners navigate tax obligations .
, operational requirements .
, .
The choice of depreciation method 3 Legal Framework in Indonesia can significantly impact tax liability.
The tax In the context of Indonesia, the legal laws and regulations regarding depreciation framework for asset depreciation and tax can vary by jurisdiction.
Studies have highlighted the importance of understanding Indonesian tax regulations prescribe specific these laws and optimizing depreciation depreciation rates and methods for various methods to minimize tax obligations legally Understanding and complying with .
, .
these regulations is essential for businesses Small businesses often operate with operating in Indonesia.
Research in this area limited financial resources and accounting emphasizes the importance of businesses This can make managing asset keeping abreast of regulatory changes and depreciation a challenging task.
The literature applying them correctly.
Indonesian tax laws have evolved to provide certain incentives approaches and guidance to assist small and deductions for small businesses.
These business owners in effectively managing asset depreciation .
, .
entrepreneurship and economic growth.
The 2 Tax Liability of Small Businesses literature discusses the potential benefits and Tax liability for small businesses is a multifaceted area of study, encompassing drawbacks of these laws and their practical implications for small business owners.
Small both tax compliance and tax optimization.
Indonesia Small businesses are subject to a range of tax specific challenges concerning tax compliance obligations, including income tax, sales tax, and employment taxes.
Ensuring compliance identified a lack of financial literacy and with tax laws is imperative .
, .
Studies access to accounting services as primary Studies Vol.
No.
October 2023: pp.
West Science Law and Human Rights This underscores the need for valuable insights into the daily routines and practices of fabric shop owners.
2 Sample Selection METHODS Empirical Research: This study uses empirical research methods to collect realworld data from fabric shop owners in Cipadu Market.
Empirical research is well suited to research practical issues, in this case, legal and financial practices relating to asset depreciation and tax liabilities.
By collecting data directly from the fabric shop owners, we aim to gain insight into their experiences and Primary Data: The primary data collecting information directly from the fabric Cipadu Market.
This approach is essential to gain insights into their specific practices, challenges, and experiences with asset depreciation and tax liabilities.
Survey: A structured questionnaire will be administered to fabric shop owners.
The survey will cover aspects related to asset depreciation practices, tax compliance, and optimization strategies.
The survey questions will be designed to systematically address the research questions and objectives.
Interviews: In-depth semi-structured interviews will be conducted with a select group of fabric shop owners to delve deeper into their experiences and perspectives.
These interviews will provide qualitative data, consist of fabric shop owners in Cipadu Market.
Tangerang.
Indonesia.
The selection criteria for fabric shop owners will include factors such as business size, length of business, and willingness to participate in the A mix of small, medium, and more established businesses will be included to gain a diverse experience.
Sampling Techniques: A combination will be used to select fabric stores based on certain criteria, such as business size and Stratified sampling will ensure that fabric shops from different layers in Cipadu Market are represented in the sample.
Sample Size: The sample size is 50 fabric shop owners, which provides a diverse and representative sample for the purpose of the Primary data collection methods include:
Sampling Criteria: The sample will techniques will be used.
Purposive sampling 1 Data Collection This approach will provide complexities involved in managing asset depreciation and taxation.
Observation: Observational data will be collected by spending time inside the fabric stores to witness firsthand the practical 3 Data Analysis Quantitative Analysis: Survey data will be analyzed using statistical software.
SPSS (Statistical Package for the Social Science.
Descriptive statistics, including frequencies, means, and percentages, will be used to analyze the quantitative data, providing a statistical overview of the fabric shop owners' practices and perspectives related to asset depreciation and tax liabilities.
Qualitative Analysis:
Interview observation data will be analyzed using thematic analysis.
Qualitative data will be transcribed and coded to find recurring themes, patterns and insights.
This qualitative analysis will provide a deeper understanding of the complexities and challenges faced by aspects of asset management and financial Vol.
No.
October 2023: pp.
West Science Law and Human Rights fabric shop owners in managing asset depreciation method.
The choice of method depreciation and tax compliance.
seemed influenced by factors such as the type of assets owned and the owners' familiarity RESULTS AND DISCUSSION with specific methods.
Approximately 85% of fabric shop owners indicated awareness of the 1 Demographic tax regulations related to asset depreciation in understanding of the participants involved in Indonesia.
However, a deeper investigation this study, this section provides an overview revealed that this awareness often did not of their demographic characteristics.
The translate into a nuanced understanding of the demographic data offers valuable insights specific rules and tax incentives governing into the diverse backgrounds and profiles of fabric shop owners in Cipadu Market.
Tangerang, who took part in the research.
Around In terms of gender, the participants documentation practices.
This inconsistency represented a reasonably balanced mix, with raised concerns about the accuracy of 55% being male and 45% being female, reported asset depreciation figures for tax demonstrating a diverse and inclusive sample of fabric shop owners.
The age distribution 3 Tax Liability Management was also diverse, with 40% falling within the In terms of managing tax liability, the 30-40 years range, indicating a mix of study revealed the following insights:
Over 70% of fabric shop owners Furthermore, the majority of reported consistent tax compliance practices, participants had between 5-10 years of including timely tax filings and meticulous experience in the fabric industry .
%), record-keeping.
This reflects a relatively high suggesting a significant level of industry level of awareness and commitment to The size of fabric shops varied, with adhering to tax laws.
Approximately 45% of a substantial portion .
%) categorized as micro-enterprises These .
-5 businesses in Cipadu Market.
In terms of deductions and credits to minimize tax education, a significant proportion held at liability while remaining compliant with tax least a bachelor's degree .
%), indicating a The study also identified notable relatively high level of formal education challenges in the realm of tax optimization.
among participants.
Notably, 60% of fabric shop owners cited a 2 Asset Depreciation Practices lack of financial expertise as a substantial The research uncovered a range of hurdle in identifying and maximizing tax asset depreciation practices among fabric shop owners in Cipadu Market.
The majority DISCUSSION Asset Depreciation Practices fabric shop owners .
%) straight-line The prevalence of the straight-line A smaller percentage .
%) utilized the declining balance method, and a few conventional small business practices.
This .
%) method offers simplicity and predictability in units-of-production Vol.
No.
October 2023: pp.
West Science Law and Human Rights asset depreciation calculations, making it suitable for businesses with limited financial encourage more businesses to explore these However, it is vital to acknowledge that different depreciation methods may be significant tax savings and enhanced financial more advantageous for specific asset types, and this could be an area for improvement in fabric shop management.
The identified challenge of a lack of financial expertise emphasizes the need for While it is promising that a majority educational initiatives, workshops, or support of fabric shop owners claimed awareness of from financial professionals to assist fabric tax regulations, the research reveals a critical shop owners in navigating the complexities of in-depth Many respondents had only a challenge, fabric shop owners may be better superficial understanding of the specific rules equipped to manage tax liability more effectively and leverage available incentives.
This underscores the necessity Implications The findings of this research carry several implications for fabric shop owners empower small business owners to make and policymakers in Indonesia.
First, there is informed decisions about asset depreciation a need for more targeted and accessible methods that can optimize tax liability.
education on asset depreciation methods and The inconsistency in asset tracking tax regulations, particularly the rules and and documentation practices is a significant incentives related to depreciation.
Fabric shop Accurate documentation is not only owners should be encouraged to explore vital for sound financial reporting but also for alternative depreciation methods that may be tax compliance.
To mitigate the risk of reporting inaccuracies and potential tax liabilities, fabric shop owners should consider improving financial performance.
implementing efficient asset management suitable for their specific assets.
Additionally, efforts to support the systems that can ensure the precise tracking of asset depreciation.
documentation practices can enhance the Tax Liability Management accuracy of financial reporting and tax The high rate of tax compliance This can be facilitated through among fabric shop owners is a positive sign, workshops, training programs, or digital asset indicating that a significant portion of them management tools.
consistently meet their tax obligations.
This is essential for avoiding penalties, maintaining a policymakers should consider simplifying tax positive business reputation, and contributing laws and providing easily understandable to government revenue.
guides for small businesses.
Supporting these The utilization of tax optimization strategies, although reported by only a deductions and credits can lead to economic fraction of fabric shop owners, presents an growth and improved business sustainability.
opportunity for growth.
Enhancing financial It is vital for government agencies, industry literacy and providing accessible guidance on associations, and financial institutions to Vol.
No.
October 2023: pp.
West Science Law and Human Rights collaborate in providing accessible financial understanding of depreciation methods and expertise and resources.
tax incentives.
Addressing these areas can contribute to the financial sustainability and prosperity of fabric shops in the local
CONCLUSION
The results and discussion presented Moreover, the research findings in this section provide a comprehensive view offer insights that extend to small businesses of the asset depreciation practices and tax in Indonesia and other emerging economies, liability management among fabric shop providing valuable lessons for optimizing tax owners in Cipadu Market.
Tangerang.
While liability and managing asset depreciation many fabric shop owners exhibit strong tax By addressing these issues, fabric compliance practices, there is substantial shop owners can enhance their financial potential for improvement in terms of tax resilience and contribute to the broader economic well-being of the region.
REFERENCES