Taxpayers In Malaysia Research Articles

Cognizant of The Importance of Tax Compliance Intention among Individual Taxpayers in Malaysia

Cognizant of The Importance of Tax Compliance Intention among Individual Taxpayers in Malaysia

Factors Affecting Compliance with Tourism Taxes: Evidence from Malaysia

Due to the fact that tax noncompliance directly impacts the source of national income, the Malaysian government and academic researchers have critically discussed the topic of tax noncompliance. Indirectly, noncompliance has an impact on a nation’s social and economic development. The Royal Malaysian Customs Department (RMCD) is in charge of overseeing and implementing Malaysia’s indirect tax laws. Existing initiatives include boosting penalties, increasing operations and inspections, hiring more enforcement agents, and pursuing tax obligations in court. These activities are largely tied to economic factors. The purpose of the study is aligning with the research’s goal which to highlight the fact that tax payers and policymakers should view and address this issue from non-economic viewpoints for a variety of reasons. First, non-economic variables’ actions are more closely tied to those that can be taken to control taxpayers’ behaviour before noncompliance occurs. Second, noncompliance prevention and control procedures can be improved because they reduce the amount of time, effort, and money needed to resolve the problem after it arises. A conceptual framework on factors that influence the compliance with tourism tax in Malaysia by using the Theory of Planned Behaviour (TPB). The study intends to characterise the behaviour and activities taken by the noncompliant tax payers in Malaysia in order to comprehend their noncompliance behaviour. This research contributes to the broader understanding of tourism tax dynamics and offers practical recommendations for policymakers aiming to enhance compliance and foster sustainable tourism practices.

THE MEDIATING EFFECT OF TRUST IN AUTHORITY ON THE RELATIONSHIP BETWEEN TAX SYSTEM REFORM, TAX KNOWLEDGE, AND E-COMMERCE BUSINESS VOLUNTARY TAX COMPLIANCE

This study aims to examine the mediating effect of trust in authority on the relationship between tax system reform, tax knowledge, and voluntary tax compliance among e-Commerce business taxpayers in Malaysia. This study posited tax system reform, tax knowledge, and trust in authority, as determinants of e-Commerce voluntary tax compliance. The study also proposed the mediating influent of trust in authority on the relationships between tax system reform, tax knowledge, and e-commerce-voluntary tax compliance. A self-administered questionnaire was distributed to 339 e-Commerce business taxpayers as respondents. The results revealed a significant and positive relationship between tax system reform, tax knowledge, and e-Commerce voluntary compliance. Additionally, tax system reform and tax knowledge have a significant direct relationship with e-commerce voluntary compliance, and have a significant relationship with mediating effect of trust in authority, indicating that there is a partial mediation effect between the relationships. The findings of this study showed how trust in authority can impact voluntary tax compliance among e-Commerce business taxpayers. This study would facilitate the stakeholders such as tax authorities, tax practitioners, and academicians to improve the understanding of the determinants that affect tax compliance of e-Commerce business taxpayers.

The Influence of Tax Education on Tax Awareness Among Secondary School Students in Malaysia

This study investigates the influence of tax education programmes on tax awareness among students in secondary schools (future taxpayers) in Malaysia. Data were gathered using a quantitative survey, both physically and via online, involving 371 respondents across Malaysia. The Structural Equation Model (SEM) using Smart PLS 4.0 was used to analyse the data, whereby two hypotheses were tested in the present study. The study results showed that formal tax education and informal tax education significantly influenced tax awareness. Subsequently, the results suggest that the young generations, who are future taxpayers in Malaysia, have a good level of tax knowledge and tax awareness. Despite this, tax education and tax awareness programmes should be continuously explored and promoted from time to time so that the understanding and awareness toward taxes among the citizens can be maintained and strengthened, and thus ultimately contribute to voluntary tax compliance. The study findings contribute to the body of literature, particularly tax-related research, as there is currently scarcity of studies which explored on tax awareness among future taxpayers such as students in schools and higher education institutions, especially in Malaysia. For future research, it is suggested that the present study can be replicated with the same settings and different samples to obtain more generalised results. It is also recommended that future researchers can adopt a longitudinal study to examine the level of tax knowledge and awareness among the students at two distinct stages, i.e. before and after their undertakings of formal tax education in secondary schools.

REFORMING THE MALAYSIAN TAX SYSTEM: THE EFFECTS OF SPECIAL VOLUNTARY DISCLOSURE PROGRAMME (SVDP), ROLE OF INLAND REVENUE BOARD MALAYSIA (IRBM), AND DEMOGRAPHICS OF TAXPAYERS ON MALAYSIAN TAX AWARENESS

A sound tax system improves government revenue by encouraging voluntary tax compliance to ensure good tax awareness among citizens. However, many issues arise with regard to tax collection. As these issues remain unresolved, the government needs to frequently implement a tax amnesty programme which is not sustainable or cost-effective in the longer run. Tax awareness becomes a significant factor in managing tax compliance behaviour within contemporary literature. Hence, this paper aims at ascertaining the effects of Special Voluntary Disclosure Programme (SVDP), the role of Inland Revenue Board Malaysia (IRBM), and demographic factors on tax awareness among Malaysian taxpayers. This paper used Smart PLS version 3 to run the data. The results confirmed that SVDP, IRBM's role, and public/ private sectors’ employment are crucial in influencing tax awareness. These findings have implications for tax policies, such as developing tax knowledge programmes and raising public awareness among individual taxpayers in Malaysia. Keywords: Special voluntary disclosure programme; tax administration; tax awareness; tax reform

Post Covid-19 and E-Commerce in Malaysia: Tax Compliance Evidence among Youtubers, Instafamous and Facebookers

E-commerce has been present for a while, but it was not widely adopted in Malaysia until Covid-19 struck in early 2020. As government places a control movement restriction preventing business from being done at their physical location, more people are engaging in online commerce using social media platforms. Due to absence of rental and employee costs, business owners have shifted their old methods of conducting business to an internet platform. However, the rapid growth of online business via social media platforms and the lack of physical presence have made it difficult for tax enforcement which open the opportunity for tax evasion. Malaysia still does not have rigorous e-commerce tax regulations and enforcement by the time Covid-19 hit and this could result to loss of billions tax revenue in future. Thus, in order to better understand the tax compliance behaviour of online business taxpayers in Malaysia, this research intends to investigate the factors that influence tax compliance behaviour of individuals in the e-commerce industry. Three independent variables were used in this study namely tax knowledge, tax morale and tax complexity. The respondent used are taxpayers who conducted online business through social media platforms namely YouTube, Instagram, and Facebook. The study used quantitative analysis where data are collected using 7-point Likert scale and analysed using multiple regression to see the significance of the variables. Using a sample of 158 respondents, analysis showed that online business owner has a poor level of knowledge that their income derived from the online business is taxable. As for tax morale and tax complexity, it shows that each online business owners knows their responsibility to pay tax if they declare. On average, they assume income tax declarations are complicated in terms of forms, computations, and procedures, but this does not lead to poorer tax compliance.

Effective Tax Rate Time Trends and its Determinants: Insight From The Corporate Taxpayer Utilising Reinvestment Allowance In Malaysia

This study aims to provide evidence on the trend in corporate tax revenue from the application of time-trend analysis of effective tax rate (ETR) amongst corporate taxpayers in Malaysia who claimed reinvestment allowance (RA) over a decade between 2007 and 2016. This study chose these observation periods because the Malaysian corporate STR has been found to have gradually reduced from 27 per cent to 24 per cent between 2007 to 2016, whereby these changes somehow impacted the tax revenue. Taxpayers who used RA for tax planning pay low taxes over time, determined through tax return data. Then, the study intended to examine the relationships between certain tax attributes, namely, company's profitability (ROA), the reinvestment allowance utilisation rate (RAUTI), type of corporate taxpayers (TPP), the book-tax gap (BTG) and how they associate to the trend in ETR. Reinvestment Allowance (RA) is renowned for being a corporate tax incentive in Malaysia to encourage investments in qualified projects through a tax deduction. An incentivised firm that pays low tax may not be engaging in fraudulent management, as generally assumed. However, it could have been due to tax avoidance strategies that can be observed through reduced or lowered effective tax rate (ETR) across ten years. Keywords: Effective Tax Rates, Tax Avoidance, Reinvestment Allowance, Tax Incentive, Taxation.

Strategic Communication: Outlining the Way Forward to Encourage Tax Compliance in Malaysia

Communication should be regarded as constitutive on the basis of proper preparation, proper execution and ongoing assessment. In this study, the scope of the strategic communication can be viewed in the context of approaches, models and concepts. This research will perform the data analysis in a qualitative manner. In this regard, Barret’s strategic employee communication model was found to be relevant to the context, in which this study will be conducted. This research is intended to discover the way out for contact issues between top management and subordinate workers, followed by targeting clear communications, disseminating the efficacy of media and platforms to taxpayers in Malaysia. Strategic communication is often approached from the viewpoint of efficiency of communication and its effects on the organization. Hence, the purpose of this review is to identify the strategic communication practice by Inland Revenue Board of Malaysia (IRBM) in order to strengthen tax compliance in Malaysia. This review has suggested that strategic supportive management, targeted message and media/ forum platform are capable of strengthening tax compliance in Malaysia.

Does Tax Knowledge Motivate Tax Compliance in Malaysia?

This study aims to clarify whether tax knowledge of individual taxpayers motivates tax compliance in Malaysia. Studies with similar topics express the fact that there still exists a gap in profiling the demographic characteristics of knowledgeable taxpayers and better compliant taxpayers in Malaysia. Age, gender, income groups, and education level were the demographic variables used to study the association. The study applied a survey method for data collection. The population targeted was the individual taxpayers across Malaysia, whereby a sample of 419 respondents involved in this study. T-test, One-Way ANOVA, and Pearson correlation analysis had been employed to analyse the data. The outcome of the study reveals that knowledgeable taxpayers are not better tax complaining of taxpayers in Malaysia. Further, the relationship between tax knowledge and tax compliance is negative and insignificant. This paper studied the association of tax knowledge with tax compliance level, which attempt to contribute to the literature and aids tax administration to intensify not only tax law educations but also tax penalties for tax evaders.

An Investigation of the Relationship Among Machiavellianism, Ethical Beliefs and Tax Compliance Behaviour: A Preliminary Study on Selected Individual Taxpayers in Malaysia

An Investigation of the Relationship Among Machiavellianism, Ethical Beliefs and Tax Compliance Behaviour: A Preliminary Study on Selected Individual Taxpayers in Malaysia

Determinants of Tax Compliance among Individual Tax Payers in Malaysia

Determinants of Tax Compliance among Individual Tax Payers in Malaysia

Tax arrears amongst individual income taxpayers in Malaysia

PurposeThe purpose of this paper is to investigate the relationship between tax arrears and socio-psychological demographic factors on individual taxpayers as well as macroeconomic factors in Malaysia.Design/methodology/approachIn this study, using proprietary data from Inland Revenue Board of Malaysia on individual income tax returns for the year of 2004 through 2012, the authors run a panel data fixed effect model analysis to examine the impact of socio-psychological demographic factors such as age, gender, marital status, income level, occupational sector, place of residence of individual tax payers as well macroeconomic factors such as real GDP, inflation and economic growth on tax arrears in Malaysia.FindingsWe find that, by and large, older male taxpayers in big towns, with high incomes, tend to accumulate tax arrears. Tax arrears are also significantly affected by real GDP, but not by marital status or occupational sector.Originality/valueTo the best of our knowledge, this is one the few studies that uses individual tax returns data to study determinants of tax arrears.

Awareness and Perception of Taxpayers towards Goods and Services Tax (GST) Implementation

Announcement the proposed implementation of Goods and Services Tax (GST) are made by the Prime Minister of Malaysia in Budget 2005. However, the implementation has been delayed and the government has made decision to implement it on April 2015, as they are wanted to receive public feedback before implementing it. Until now, many communities are less understanding and confused regarding GST system and give a negative perception about it. Accordingly, this study attempts to find out what level of awareness and perception to GST taxpayers in Malaysia. This study only consists 256 civil servants of the secondary school teachers in the area Kuala Kangsar, Perak. Data collected using questionnaires. The results showed that the level of awareness was moderate and the majority of respondents give a high negative perception to the impact of GST. This eventually causes the majority of respondents did not accept the implementation of GST in Malaysia.

Understanding the Effect of Demographic and Personality Traits on the E-Filing Continuance Usage Intention in Malaysia

The submission of tax return forms via e-filing has shown a tremendous increase among taxpayers in Malaysia since its launch in 2006, particularly for individual taxpayers. Around 33 per cent of the total registered individual taxpayers in Malaysia have filed their income taxes via e-filing in 2010. E-filing services serve measurable benefits to both taxpayers and the Inland Revenue Board of Malaysia (IRBM) in terms of convenience, time saving, accuracy, security, cost effectiveness, reduced processing time and increase in productivity and efficiency. Unfortunately, as a result of digital divide, all the taxpayers may not be able to realize these benefits. This study examines the effect of individual demographic characteristics of age, gender, income, education and ethnicity, and the Big Five personality traits of extraversion, conscientiousness, neuroticism, agreeableness and openness to experience, on the e-filing continuance usage intention. Data were collected from five urban states in Malaysia, namely, Penang, Perak, Selangor, Kuala Lumpur and Johor. The result indicates a significant support for most of the demographic and personality variables. The implication of the study and future research are elaborated in the discussion.

The influence of religiosity on taxpayers’ compliance attitudes

Purpose– This paper aims to explore the role of religiosity in determining taxpayers’ attitudes towards tax compliance and discusses likely explanations for the findings in the context of the literature.Design/methodology/approach– A sequential exploratory mixed-methods research design was used in this study. Data were collected using a self-administered survey which involved approximately 300 individual taxpayers in Malaysia, followed by face-to-face interviews with 14 individual taxpayers. Majority of the respondents in both survey and interviews were salaried taxpayers, and the remaining were self-employed taxpayers.Findings– Religiosity is found to have a minimal but statistically significant positive impact on voluntary tax compliance. This probably can be explained by the strong religious values held by many Malaysians, as well as the concept of giving which has been emphasised in almost all religions.Research limitations/implications– Because this study did not differentiate between religious values and moral values in measuring the source of respondents’ internal values, there was a possibility that their internal values may be derived from both sources. Hence, comparing the impact of individuals’ religious values with individuals’ moral values that have no influence from religion on tax compliance is suggested for future research.Practical implications– A new mechanism is suggested to the Malaysian tax authority in regards to the treatment of religious payment to reduce the sense of inequality among citizens and taxpayers.Originality/value– This study enriches the limited literature of tax compliance from the perspective of developing countries, particularly Malaysia, and adds to the limited literature internationally from a religiosity perspective.

Challenges in Understanding Compliance Behaviour of Taxpayers in Malaysia

Since the implementation of self assessment in Malaysia almost a decade ago, taxpayers’ compliance behaviour has attracted considerable attention. Tax compliance research in Malaysia has predominantly been in the context of income tax and personal taxpayers, and has been conducted using survey methods and experimental approaches. Access to taxpayers’ data is rarely made available to academic researchers by the Inland Revenue Board of Malaysia (IRB), thus studies have tended to rely on self-reported behaviour and convenience sampling which have limited the extent to which findings can be generalised. Further, most studies have considered only a limited range of variables that may or may not influence compliance behaviour which is widely recognised as being a complex phenomenon. Based on studies to date, it appears that Malaysian taxpayers have high ethics and that individuals’ tax knowledge is a key influence on their compliance behaviour. Scope exists for further research using a range of methodologies, studies that are more comprehensive and longitudinal, and using a wider range of taxes, taxpayers, and compliance obligations.