Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch

Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch

Tax revenues are the biggest sources of government funds. However, the pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The issue on tax non-compliance has been the subject of much discussion among both academicians and practitioner in Malaysia....

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Main Author: Nurul Asni, Mohamad Alias
Format: Thesis
Language:eng
eng
Published: 2017
Subjects:
HJ4771.6 Income Tax
Tax Returns.
Online Access:https://etd.uum.edu.my/6603/1/s819518_01.pdf
https://etd.uum.edu.my/6603/2/s819518_02.pdf
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id my-uum-etd.6603
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Abdul Aziz, Saliza
topic HJ4771.6 Income Tax
Tax Returns.
spellingShingle HJ4771.6 Income Tax
Tax Returns.
Nurul Asni, Mohamad Alias
Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
description Tax revenues are the biggest sources of government funds. However, the pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The issue on tax non-compliance has been the subject of much discussion among both academicians and practitioner in Malaysia. In many cases it is impossible to prove noncompliance. Increasing voluntary compliance among Small-and-Medium-sized Corporations (SMCs) is thus a worthwhile endeavor. In order to do so, an in-depth understanding of the factors fostering non-compliance is essential. In Malaysia, SMCs are source of tadfiscal revenue to the Federal government. However, there is still a huge number of this corporate tax payer which did not comply with the tax authority i.e. Inland Revenue Board of Malaysia. The purpose of this paper is to examine whether company size, types of industry and age of the company are influencing the tax non-compliance among SMCs in Malaysia. This study analyzes and test the tax-audited cases finalized by the Kuala Lumpur Bandar branch of Inland Revenue Board of Malaysia (IRBM) in year 2015. Data are gathered from Case Management System (CMS) extracted by officer in charge from IRBM. Population of the study is focused on the SMCs cases resolved in year 2015 by tax auditor in Kuala Lumpur Bandar Branch. A total of 382 cases gathered from the IRBM of Kuala Lumpur Bandar branch. Out of those cases, only 329 cases are tax non-compliance company and to be analyzed. The finding shows that two factors i.e. size of the company and types of industry are found to significantly influence tax noncompliance among SMCs. The finding of this study could be used by the tax authorities and policy makers to determine company or SMCs to be audited in future. In addition, it is hoped that the study's finding would be used to help the IRBM to increase compliance among taxpayers. The IRBM may develop more efficient and effective strategies in the future in order to collect tax appropriately. The limitation of this study is also presented in this paper.
format Thesis
qualification_name masters
qualification_level Master's degree
author Nurul Asni, Mohamad Alias
author_facet Nurul Asni, Mohamad Alias
author_sort Nurul Asni, Mohamad Alias
title Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
title_short Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
title_full Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
title_fullStr Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
title_full_unstemmed Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch
title_sort determinants of tax non-compliance among smcs : evidence from irmb kl bandar branch
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2017
url https://etd.uum.edu.my/6603/1/s819518_01.pdf
https://etd.uum.edu.my/6603/2/s819518_02.pdf
_version_ 1747828102259539968
spelling my-uum-etd.66032021-08-18T04:43:28Z Determinants of tax non-compliance among SMCS : evidence from IRMB KL Bandar Branch 2017 Nurul Asni, Mohamad Alias Abdul Aziz, Saliza Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HJ4771.6 Income Tax. Tax Returns. Tax revenues are the biggest sources of government funds. However, the pervasiveness of tax non-compliance remains a serious concern to most tax authorities around the world. The issue on tax non-compliance has been the subject of much discussion among both academicians and practitioner in Malaysia. In many cases it is impossible to prove noncompliance. Increasing voluntary compliance among Small-and-Medium-sized Corporations (SMCs) is thus a worthwhile endeavor. In order to do so, an in-depth understanding of the factors fostering non-compliance is essential. In Malaysia, SMCs are source of tadfiscal revenue to the Federal government. However, there is still a huge number of this corporate tax payer which did not comply with the tax authority i.e. Inland Revenue Board of Malaysia. The purpose of this paper is to examine whether company size, types of industry and age of the company are influencing the tax non-compliance among SMCs in Malaysia. This study analyzes and test the tax-audited cases finalized by the Kuala Lumpur Bandar branch of Inland Revenue Board of Malaysia (IRBM) in year 2015. Data are gathered from Case Management System (CMS) extracted by officer in charge from IRBM. Population of the study is focused on the SMCs cases resolved in year 2015 by tax auditor in Kuala Lumpur Bandar Branch. A total of 382 cases gathered from the IRBM of Kuala Lumpur Bandar branch. Out of those cases, only 329 cases are tax non-compliance company and to be analyzed. The finding shows that two factors i.e. size of the company and types of industry are found to significantly influence tax noncompliance among SMCs. The finding of this study could be used by the tax authorities and policy makers to determine company or SMCs to be audited in future. In addition, it is hoped that the study's finding would be used to help the IRBM to increase compliance among taxpayers. The IRBM may develop more efficient and effective strategies in the future in order to collect tax appropriately. The limitation of this study is also presented in this paper. 2017 Thesis https://etd.uum.edu.my/6603/ https://etd.uum.edu.my/6603/1/s819518_01.pdf text eng public https://etd.uum.edu.my/6603/2/s819518_02.pdf text eng public masters masters Universiti Utara Malaysia Abdul Mansor, H., & Mohd Hanefah, M. (2008). Tax compliance costs of Bumiputera small and medium enterprises in Northern Malaysia. International Journal of Management Studies, Vol. 15 No. 1, 21-42. Allingham, M. G., & Sandmo, A. (1972). Income Tax Evasion: A Theoretical Analysis. Journal of Public Economics, 323-338. Alm, J. (1999). 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(2001). Shifting Tax Burdens Through Exemptions and Evasion, An Empirical Investigation of Uganda. Washington, DC: World Bank Policy Research. Giles, D. (1998, June 17). Modeling the tax compliance profiles of New Zealand firms: evidence from audit records. Econometrics Working Papers No. 9803. Hanlon, M., & Heitzman, S. (201 0). A review of tax research. Journal of Accounting and Economics, Vol. 50 Nos 2/3, 127-178. Hanlon, M., Mills, L., & Slemrod, J. (2007). An Empirical Examination of Corporate Tax Noncompliance. Taxing Corporate Income in the 21st Century, (pp. 171-210). Ann Arbor. IRBM. (20 14). Annual Report. Malaysia: Malaysian National Library. Joulfaian, D. (2000). Corporate income tax evasion and managerial preferences. The review of Economics and Statistics, 698-701. Kamdar, N. (1997). Corporate income tax compliance: a time series analysis. Atlantic Economic Journal, 37-49. Kasipillai, J., & Abdul Jabbar, H. (2006). Gender and ethnicity differences in tax compliance. Asean Academy of Management Journal, 73-88. Md Noor, R., Mastuki, N., Ismail, N., & Abdul Aziz, A. (2009). Tax evasion: evidence from tax investigation cases in Malaysia. Asia Pacific International Conference on Forensic Accounting & Financial Criminology, (pp. 78-89). Menara Kuala Lumpur. Wallace, S. (2002). Imputed and Presumptive Taxes: International Experiences and Lessons for Russia. Atlanta, GA: Andrew Young School of Policy Studies, Georgia State University. Watts, R., & Zirnrnerman, J. (1986). Positive Accounting Theory Englewood Cliff, NJ: Prentice Hall. Webley, M. S. (2004). The Impact of Transparency: A Cross-National Study. Yusof, N. A., Ling, L. M., & Wah, Y. B. (2014). Tax non-compliance among SMCs in Malaysia: tax audit evidence. Journal of Applied Accounting Research, 215-234. Zimmerman, J. (1983). Taxes and firm size. Journal of Accounting and Economics, Vol.5 No.1, 119-149.

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