Factors Affecting Individual Taxpayers' Compliance in Malaysian Tax Filing System

Abstract

The compliance behavior of the tax residents is highly correlated with the tax revenue of the government. Therefore, the prevalence of tax non-compliance remains a critical concern to the tax authorities around the world. Since tax revenue is one of the most important revenues to the Malaysian government, it is crucial to identify the factors that affect individual taxpayers' compliance in Malaysia. To test the relationship between the influencing factors and tax compliance behavior, 50 Malaysian taxpayers have been invited to participate in this study. Based on the past literatures, compliance cost, tax knowledge and tax agent reliability have been selected as the independent variables of this study. Data were collected via questionnaires created based on the research objectives. Findings suggested that compliance cost, tax knowledge and tax agent reliability have significant relationship with the tax compliance behaviors. The conclusion and recommendation to the stakeholders were also discussed.