THE IMPACT OF TAX AWARENESS AND TAX KNOWLEDGE ON TAX NON-COMPLIANCE FROM THE PERSPECTIVE OF POTENTIAL TAXPAYERS

Abstract

Taxpayer Non-Compliance may cause the failure of not achieving the tax revenue target in Malaysia. One of the groups of taxpayers is the individual taxpayer. Thus, the Malaysian government has worked on some strategies to optimize the tax collection from this group. Regarding this matter, the researcher is interested in studying the impact of tax awareness and tax knowledge on taxpayer non-compliance among potential taxpayers. The theory applied in this research is the Theory of Planned Behaviour (TPB). This study used a survey method among accounting background final year students of the Bachelor of Accountancy and Association of Chartered Certified Accountants (ACCA) program at Universiti Poly-Tech Malaysia Kuala Lumpur (UPTM). The sampling method used was proportional random sampling and the data collected were analyzed using Statistical Package for the Social Sciences (SPSS). The results show that there is a negative relationship between tax awareness and tax knowledge towards tax non-compliance. This means that if these taxpayers possess a high level of tax awareness and knowledge, the possibility of tax non-compliance is lower. Therefore, in this study, the value added to the tax research is that tax education should be implemented for tertiary students, regardless of whether they come from an accounting or non-accounting background. This is because tertiary students who are also future taxpayers will have more awareness of the importance of tax as they have gained tax knowledge from the formal tax education delivered during their study at the tertiary level.