Local communities are human collectivities, territorially demarcated from political and

administrative point of view, which have public authorities different from those of the state. This
is a condition of financial autonomy, because the administrative autonomy would not be possible
without the financial autonomy, which would ensure its financial support for the operation.
The distinct organization of local finances based on their financial autonomy is necessary
because:
• local communities are best aware of their own resources regarding public money resources and
especially the expenses to be covered;
• allows the central finances to be relieved by an expense;
• reduce the number and magnitude of cash flows between the two structural levels of public
finances;
• allows better tracking of the way public funds are used;
Online tax system is referred to as the transmission of tax information directly to the tax
administration using the Internet (Edwards-dowe, we, 2008). The online tax system makes an
effective impact on the economic toward improving the level of income generation and tax
compliance by the taxpayers. This is because of its convenience, time saving, cost effectiveness
from both the tax administrators and the taxpayers (Azmi, 2012) There are three main latent
construct to be addressed in this study, which includes tax service quality, perceived ease of use
and usage of an online tax system. The research questions for this study are (1) Do perceive ease
of use significantly influences the usage of online tax system (2) Is there a mediating effect of
perceived ease of use on the relationship between tax service quality towards an online tax
system (3). What is the influence of tax service quality of the online tax system? These questions
are being answered with the general objective of the study, which is to examine the mediating
effect of perceived ease of use on the relationship between tax service quality and online tax
system. The specific objectives are (1) to examine the significant relationship between perceived
ease of use and online tax system usage, (2) to examine the mediating effect of perceived ease of
use on the relationship between tax service quality and online tax system usage and (3) to
examine the relationship between tax service quality and online tax system.

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