CULTURE INFLUENCE TOWARDS INTENTION OF TAX NON-COMPLIANCE AMONG SME OWNERS

Nor Zuhairatun Md Radzi

doi:10.31580/apss.v5i2.1079

Abstract

The importance of SME as backbone of Malaysia in generating national income is undoubtedly. However, little has been focused on culture influence as one of the determinants of tax non-compliance. With the multicultural society which having different culture, belief and value, it is important to examine culture influence towards tax non-compliance. Therefore, this study attempts to examine the influence of culture towards intention of tax non-compliance using the framework of Hofstede’s Cultural Dimensions Theory as basis of the study. The survey has collected data of 248 usable SME owners from northern region of Peninsular Malaysia. Findings reveal that power distance, individualism, masculinity, uncertainty avoidance and long-term orientation are significantly related with intention of tax non-compliance. Suggestions for policy makers and future researchers are also highlighted. 

Highlights

The objective of the study is to examine the influence of culture on the intention of tax noncompliance among SME owners
SME owners tend to engage in tax non-compliance due to huge opportunities involving in cash business transactions and avoid cash declaration (Mohamad, Zakaria and Hamid, 2016) especially because their actions appeared to be mostly overlooked by the tax authority (Mohd Ali, 2013)
Little has been focused on culture influence in explaining tax non-compliance among SME owners

Summary

Introduction

The objective of the study is to examine the influence of culture on the intention of tax noncompliance among SME owners. SMEs as backbone of Malaysia have leads the economic local and export demand with a contribution up to 99.2 percent of businesses and companies in Malaysia (Kamaruddin, 2014). SME owners tend to engage in tax non-compliance due to huge opportunities involving in cash business transactions and avoid cash declaration (Mohamad, Zakaria and Hamid, 2016) especially because their actions appeared to be mostly overlooked by the tax authority (Mohd Ali, 2013).

Objectives

Results

Conclusion