Tax knowledge and tax compliance determinants in self assessment

More documents

Recommendations

Info

no yes Figure 6.4 Attended tax courses 192 292 876 0 200 400 600 800 1000 Figure 6.5 Audited by IRB 1028 6.4 INTERNAL VALIDITY (RELIABILITY TEST) 36 Internal validity refers to cause-effect relationship among independent and dependent variables. It attempts to answer “to what extent does the research design permit the researcher to conclude that the independent variable A causes a change in the dependent variable B” (Sekaran 2000:151). Research with high internal validity enables a researcher Yes No
to better argue that a relationship is causal whereas low internal validity produces less valid results. (Sekaran 2000:151). Reliability tests measure the internal consistency and stability of the multi-item scales and the extent to which the measurement across the items in the questionnaires are biased (Hong, 2005). Hair et. al. (2006:102,137) benchmarked data, stating that alphas of more than .70 are good enough to be analysed in order to produce reliable and valid data, although this may decrease to .60 in exploratory research. Results (see Table 6.2) indicate that the value of Cronbach’s alpha 117 for 8 out of 16 constructs were more than 0.700, 4 constructs were more than 0.600, while the others were less than 0.600 but more than 0.5000 which suggests that the instruments used were valid and of a high degree of reliability. In Eriksen and Fallan (1996: 392), their Cronbach alpha were 0.52 (pre test) and 0.60 (post test). Although some of the variables had slightly low Cronbach’s Alpha, based on Eriksen and Fallan (1996) the coefficients were acceptable for further analysis and the ability to produce valid, reliable and verifiable results was convincing (Hair et. al. 2006: 137; Sekaran, 2000: 310-313). The following table summarises the results of reliability tests (Cronbach’s Alpha) for factors involved. 117 Since each factor is measured by three questions in the survey, this reliability test measures consistency responses in relation with the factor. 293
Page 1 and 2:
TAX KNOWLEDGE AND TAX COMPLIANCE DE
Page 3 and 4:
ABSTRACT Self assessment system (SA
Page 5 and 6:
DEDICATION To my late father, fathe
Page 7 and 8:
TABLE OF CONTENTS Abstract ii Dedic
Page 9 and 10:
2.6 SELF ASSESSMENT SYSTEM - A CONC
Page 11 and 12:
4.3.5.1 Age 214 4.3.5.2 Income leve
Page 13 and 14:
6.3 RESPONDENT BACKGROUND 288 6.4 I
Page 15 and 16:
TO TAX ADMINISTRATORS 392 8.4 LIMIT
Page 17 and 18:
LIST OF TABLES Table 2.1: SAS intro
Page 19 and 20:
independent variables. Table 6.14:
Page 21 and 22:
1.1 INTRODUCTION CHAPTER 1 INTRODUC
Page 23 and 24:
Efficiency refers to how the tax au
Page 25 and 26:
(US) and the United Kingdom (UK) we
Page 27 and 28:
and Lundstedt, 1976), gender (Vogel
Page 29 and 30:
Revenue Board Malaysia (IRB). The s
Page 31 and 32:
constitutional elective monarchy (f
Page 33 and 34:
countries. Despite similar capitali
Page 35 and 36:
development on tax compliance resea
Page 37 and 38:
conclusions about what the Malaysia
Page 39 and 40:
could provide new insights to the I
Page 41 and 42:
ecome more aware of their tax oblig
Page 43 and 44:
“ future research can explicitly
Page 45 and 46:
The result of this study will contr
Page 47 and 48:
and stepwise multiple regressions.
Page 49 and 50:
CHAPTER 2 SELF ASSESSMENT SYSTEMS-
Page 51 and 52:
Table 2.1: SAS introduction in coun
Page 53 and 54:
with postwar democratic thought (Ki
Page 55 and 56:
Formal System. Table 2.2 summarises
Page 57 and 58:
To reduce the possibility of taxpay
Page 59 and 60:
This could be aided through continu
Page 61 and 62:
of the tax system (Eriksen and Fall
Page 63 and 64:
have a good and reasonable knowledg
Page 65 and 66:
compliance, many taxpayers perceive
Page 67 and 68:
had a low significant impact on com
Page 69 and 70:
2.4 HOW SELF ASSESSMENT IS OPERATED
Page 71 and 72:
keeping as well as the perceived le
Page 73 and 74:
issues still remain important and c
Page 75 and 76:
Table 2.4: United States’ complia
Page 77 and 78:
In 1944 a new income tax system was
Page 79 and 80:
assessment system, to overcome thes
Page 81 and 82:
of the amounts deducted by employer
Page 83 and 84:
Notes: Table 2.9 - United Kingdom-
Page 85 and 86:
were quite difficult to complete. M
Page 87 and 88:
In conclusion, tax development in t
Page 89 and 90:
• Individual income tax has a min
Page 91 and 92:
2008). E-Tax (e-filing) was also in
Page 93 and 94:
Self-assessment in Japan has gradua
Page 95 and 96:
administrations and their perceptio
Page 97 and 98:
In terms of personal income tax, th
Page 99 and 100:
Although more operations are becomi
Page 101 and 102:
Table 2.16: OECD Self-assessed Coun
Page 103 and 104:
it is acknowledged that wide variet
Page 105 and 106:
deemed to be the amount of tax liab
Page 107 and 108:
Tax and compliance costs remain a c
Page 109 and 110:
) Sri Lanka Income tax in Sri Lanka
Page 111 and 112:
Table 2.21: Tax development in Sri
Page 113 and 114:
Table 2.23: Sri Lanka - Tax revenue
Page 115 and 116:
information which is related to tax
Page 117 and 118:
assessed, they represented only 67
Page 119 and 120:
(d) applicable to ‘white return
Page 121 and 122:
Sources: OECD (2007:124) (OECD in F
Page 123 and 124:
COUNTRY Table 2.27: Aggregate Admin
Page 125 and 126:
United States Table 2.28: Enforceme
Page 127 and 128:
Malaysia impose a penalty percentag
Page 129 and 130:
2.5.5.3 Electronic filing Table 2.3
Page 131 and 132:
Table 2.31: SAS - Tax Education in
Page 133 and 134:
and to speed up tax collections tha
Page 135 and 136:
Peninsular Malaysia is separated fr
Page 137 and 138:
ITA consolidated the three acts of
Page 139 and 140:
3.4 PERSONAL INCOME TAXES IN MALAYS
Page 141 and 142:
3.4.4 Basis year Section 2 of the I
Page 143 and 144:
eturn (refer Appendix 4). A separat
Page 145 and 146:
Table 3.1: List of deductions for Y
Page 147 and 148:
c) Amount of zakat 61 payment. The
Page 149 and 150:
Having discussed how personal incom
Page 151 and 152:
A new system, known as the Self Ass
Page 153 and 154:
igger increase in 2006 too), a sign
Page 155 and 156:
1) Married woman were required to f
Page 157 and 158:
Table 3.6: A brief comparison on th
Page 159 and 160:
impact upon total revenue. Table 3.
Page 161 and 162:
(STD) 67 audits and 4) investigatio
Page 163 and 164:
Centres (RSCs) in Perak, Selangor,
Page 165 and 166:
planned and implemented special tra
Page 167 and 168:
sufficiently ‘educate’ taxpayer
Page 169 and 170:
which netted RM226.05 million in ta
Page 171 and 172:
In the next chapter, I will discuss
Page 173 and 174:
compliance including age, gender, l
Page 175 and 176:
isks of non-compliant behaviour the
Page 177 and 178:
The wider perspective of tax compli
Page 179 and 180:
Table 4.1: Approach to tax complian
Page 181 and 182:
Figure 4.1: Compliance Index in Ind
Page 183 and 184:
Table 4.2: Tax compliance index int
Page 185 and 186:
Table 4.3: Tax compliance in transi
Page 187 and 188:
Kasipillai et. al. (2003), Lewis (1
Page 189 and 190:
7. GDP per capita, 8. tax system, 9
Page 191 and 192:
Singapore 6.00 8.18 Slovakia 2.62 2
Page 193 and 194:
Given evidence that tax knowledge a
Page 195 and 196:
The result of the study suggested t
Page 197 and 198:
there is insufficient knowledge abo
Page 199 and 200:
taxpayers who read an objectively p
Page 201 and 202:
In conclusion, after taking into co
Page 203 and 204:
4.3.1.1 Tax rates This subsection d
Page 205 and 206:
2008) and increasing tax rates will
Page 207 and 208:
The result also evidenced that the
Page 209 and 210:
4.3.1.4 Summary This subsection dis
Page 211 and 212:
Roth et. al. (1989) suggested that
Page 213 and 214:
simplified the range of guidance th
Page 215 and 216:
potentially could help taxpayers to
Page 217 and 218:
probability) using three major data
Page 219 and 220:
whole population of North Carolina,
Page 221 and 222:
factors in taxpayer compliance, nam
Page 223 and 224:
likely to occur (Allingham and Sand
Page 225 and 226:
y the government and the prices reg
Page 227 and 228:
4.3.3.4 Referents groups (family an
Page 229 and 230:
and referent groups. In the followi
Page 231 and 232:
Table 4.5: Relationship between fin
Page 233 and 234:
evading tax and the consequences of
Page 235 and 236:
Table 4.6: Some previous studies on
Page 237 and 238:
4.3.5.2 Income level Jackson and Mi
Page 239 and 240:
Table 4.7 : Some previous studies o
Page 241 and 242:
4.3.5.3 Culture Chan et. al. (2000)
Page 243 and 244:
avoidance (UA) and masculinity (MAS
Page 245 and 246:
are not aiming to become accountant
Page 247 and 248:
2003 Hasseldine and Hite Female tax
Page 249 and 250:
eferent groups) because these facto
Page 251 and 252:
5.1 INTRODUCTION CHAPTER 5 RESEARCH
Page 253 and 254:
Using a sample from a telephone dir
Page 255 and 256:
income. However, the total of indiv
Page 257 and 258:
taxpayers had gone through filing p
Page 259 and 260:
2004 Ming Ling, Obid and Meera 2003
Page 261 and 262: 5.2.2 The respondents Like Spicer a
Page 263 and 264: independence particularly from any
Page 265 and 266: X be chosen. Respondents are asked
Page 267 and 268: probability’ to ‘very high prob
Page 269 and 270: Loo (2006) used a mixed method appr
Page 271 and 272: questions’ approach was based on
Page 273 and 274: ‘extremely good’, ‘good’,
Page 275 and 276: 5.4.1.2 Data analysis technique T-t
Page 277 and 278: 5.4.2.2 Hypotheses development for
Page 279 and 280: The association between tax knowled
Page 281 and 282: TNAWARE i - Tax knowledge about awa
Page 283 and 284: A. Demographics control variables (
Page 285 and 286: B. Tax background control variables
Page 287 and 288: 5.4.3.3 Data analysis techniques In
Page 289 and 290: The role of Inland Revenue Board (E
Page 291 and 292: H4B- Positive perception of governm
Page 293 and 294: Besley, Preston and Ridge (1997) re
Page 295 and 296: In agreement with Spicer and Lundst
Page 297 and 298: improved through better tax knowled
Page 299 and 300: EQUITY i - Perception on equity and
Page 301 and 302: H5B - With regard to other tax comp
Page 303 and 304: used. A wider coverage of tax knowl
Page 305 and 306: 6.1 INTRODUCTION CHAPTER 6 ANALYSIS
Page 307 and 308: total population of Malaysia, parti
Page 309 and 310: 300 250 200 150 100 50 0 128 252 Fi
Page 311: 500 400 300 200 100 0 333 1,001- 2,
Page 315 and 316: 6.5.1 T-tests, Mann-Whitney U. and
Page 317 and 318: familiarity with employment income
Page 319 and 320: no significant mean difference betw
Page 321 and 322: 6.5.2 One-way ANOVA, post hoc test
Page 323 and 324: Non-parametric test, KW and median
Page 325 and 326: (B6) (F= 3.1113, p < 0.01) and reba
Page 327 and 328: IV IV A5 (RM) 10000 A5 (RM) 10000 A
Page 329 and 330: tax knowledge (p
Page 331 and 332: KW tests also suggested that there
Page 333 and 334: Figure 6.6 illustrates the results
Page 335 and 336: Table 6.12: Summary and relationshi
Page 337 and 338: Table 6.13: Stage 2 -Pearson correl
Page 339 and 340: Table 6.14 : Stepwise multiple regr
Page 341 and 342: The estimated coefficient of correl
Page 343 and 344: low correlation (p
Page 345 and 346: A. Dependent variable TCHYP Table 6
Page 347 and 348: TCHYP 40:60 = α + β1TNRESi + β2T
Page 349 and 350: B. Dependent variable TCDIR Table 6
Page 351 and 352: TCDIR 0 = α + β1TNRESi + β2TNEMP
Page 353 and 354: EQUITY and TOTAL were significantly
Page 355 and 356: 6.8.2 Factors affecting tax complia
Page 357 and 358: GROUP i - Referent group ROLEi i -
Page 359 and 360: 6.8.4 Summary results of Stage 4 Ta
Page 361 and 362: Table 6.25: Stage 5 -Pearson correl
Page 363 and 364:
Note: Panel B: (Constant) 20.773 9.
Page 365 and 366:
6.9.2 Dependent variable - TCDIR Ta
Page 367 and 368:
Table 6.28 (Panel B) suggests that
Page 369 and 370:
Notes: *** Significant at 0.01 leve
Page 371 and 372:
subject matter. Most researchers vi
Page 373 and 374:
ANOVA test results were sufficientl
Page 375 and 376:
Table 6.33: Tax compliance direct -
Page 377 and 378:
Table 6.35: Tax compliance hypothet
Page 379 and 380:
Table 6.37: Results summary Results
Page 381 and 382:
7.1 INTRODUCTION CHAPTER 7 DISCUSSI
Page 383 and 384:
eason why the CRA emphasised the
Page 385 and 386:
As this study suggested that tax kn
Page 387 and 388:
and Hudson, 2002; Wearing and Heade
Page 389 and 390:
up with education programmes that c
Page 391 and 392:
of being audited, perceptions of go
Page 393 and 394:
Braithwaite et. al. (2009). In addi
Page 395 and 396:
In relation to this finding (financ
Page 397 and 398:
cultivating personal awareness of c
Page 399 and 400:
With regard to age, this result sup
Page 401 and 402:
CHAPTER 8 CONCLUSIONS Self assessme
Page 403 and 404:
This study seeks to contribute to t
Page 405 and 406:
Like many countries, implementing a
Page 407 and 408:
identified the tax compliance deter
Page 409 and 410:
Further analysis (refer to section
Page 411 and 412:
middle income earners) for tax admi
Page 413 and 414:
latest information on tax regulatio
Page 415 and 416:
8.4 LIMITATIONS It is acknowledged
Page 417 and 418:
espondents regarding tax compliance
Page 419 and 420:
Bank Negara Malaysia (2006). Annual
Page 421 and 422:
Chow, C.Y. (2004). Gearing up for t
Page 423 and 424:
Fishbein, M., and Ajzen, I. (1975).
Page 425 and 426:
Inland Revenue Board (IRB) Malaysia
Page 427 and 428:
Lempert, R. (1988). Internal Revenu
Page 429 and 430:
Moriaryty, S. (1998). Tax complianc
Page 431 and 432:
Shoven, J. (1989). The Japanese tax
Page 433 and 434:
Vogel. J. (1974). Taxation and publ
Page 435 and 436:
APPENDIX 1 Section 13. General prov
Page 437 and 438:
shall be deemed to be derived from
Page 439 and 440:
year of assessment (the responsibil
Page 441 and 442:
APPENDIX 4 FORM BE 2007 FOR INDIVID
Page 443 and 444:
Name Tax Reference No. PART C : STA
Page 445 and 446:
Name Tax Reference No. PART F: STAT
Page 447 and 448:
for for for for for reference refer
Page 449 and 450:
GENERAL INSTRUCTION. This survey is
Page 451 and 452:
ii) What is the probability of comp
Page 453 and 454:
The following income MUST BE INCLUD
Page 455 and 456:
SECTION C (TAX COMPLIANCE) Please s
Page 457:
D11. Designation (Grade for governm
show all

Tax knowledge and tax compliance determinants in self assessment

Create successful ePaper yourself

Delete template?

Save as template?