Tax complexities in the Malaysian corporate tax system: minimise to maximise

Purpose – This paper aims to examine areas of tax difficulties encountered by corporate taxpayers in complying with tax obligations under the self-assessment system. Design/methodology/approach – A two-phase exploratory mixed methods approach was employed. The first phase involves eight focus group interviews with 60 tax auditors from the Inland Revenue Board of Malaysia (IRBM) and the second phase adopts a mixed-mode survey among selected Malaysian corporate taxpayers. Thematic analysis and descriptive and inferential analysis were used to examine the qualitative and quantitative data in achieving the objective. Findings – Three dimensions of tax complexity encountered by corporate taxpayers were tax computations, record keeping and tax ambiguity. The first two complexity dimensions were faced largely by smaller companies. On the other hand, the least difficult tax-related areas were dealing with tax agents, submitting tax returns within the given time and dealing with the tax authority. Practical implications – In a tax policy context, this study enables international tax authorities in general, and Malaysian tax authority in particular, to have greater confidence in developing and administering tax laws and policies to maintain and/or increase the overall level of corporate tax compliance. Originality/value – Unlike prior studies that mainly used individual taxpayers or students as research participants, this study employed corporate tax auditors from the tax authority and corporate tax officers. Tax auditors and corporate taxpayers provide invaluable insights into the possible determinants of compliance variables. These insights are based on their practical experience in handling corporate tax audits and managing corporate tax matters, respectively

The impact of threat of punishment on tax compliance and non-compliance attitudes in Malaysia

Threat of punishment has been emphasized as one of the effective tools to deter taxpayers’ non-compliance attitudes.Thus this study aims to explore the impact of threat of punishment on both individual taxpayers’ attitudes, compliance and non-compliance. The findings from a mixed-modes survey indicate that threat of punishment is insignificant on taxpayers who are willing to comply with tax laws.They tend to avoid taxes when they are threatened with tax audits and penalties.Overall, threat of punishment appears to have not only an insignificant impact on compliant taxpayers but also trigger their intentions to be less compliant

An analysis of the gap between accounting depreciation and tax capital allowance in Malaysia

Malaysian tax system includes a tax depreciation rule separate from accounting depreciation.This paper is to compares and contrasts the accounting treatment of depreciation and the tax treatment of capital allowance.The gap between the accounting and tax is resulted from different definitions of capital expenditure and qualifying asset and also different deduction rate and useful life used in calculating depreciation.This paper proposes the government to revise the current capital allowance system

Application of rasch model on resilience in higher education: an examination of validity and reliability of Malaysian academician happiness index (MAHI)

This preliminary study was conducted to examine and verify the validity and reliability of the instrument on the Malaysian Academician Happiness Index (MAHI) on resilience. MAHI could be seen as a tool to measure the level of happiness and stress of academicians before determining how resilient the academicians were. Resilience can be defined as a mental ability of a person to recover quickly from illness or depression. MAHI instrument consisted of 66 items. The instrument was distributed to 40 academicians from three groups of universities which were the Focus University, Comprehensive University and Research University is using a survey technique. The instrument was developed to measure three main constructs which were the organization, individual and social that would affect the happiness and stress levels of academicians. This preliminary study employed the Rasch Measurement Model uses Winsteps software version 3.69.1.11. to examine the validity and reliability of the items. The results of the analysis of the MAHI instrument showed that the item reliability was 0.87, person reliability was 0.83 and value of Alpha Cronbach was 0.84. Meanwhile, misfit analysis showed that only there was one item with 1.46 logit that could be considered for dropping or needed improvement. Therefore, it highlighted that most of the items met the constructs’ need and can be used as a measurement indicator of MAHI. The implication of this instrument can help Malaysian academicians to be more resilient in facing challenges in the future

The role of tax agents in sustaining the Malaysian tax system

In Malaysia, a self-assessment system has been implemented for all companies for more than a decade.The system necessitates corporate taxpayers to declare and calculate accurate sources of income, estimate income tax payable, keep records for audit purposes, and comprehend income tax legislation.In complying with these demands, many corporate taxpayers have to depend on the assistance of tax agents.Using survey data, this study aims to examine the role of tax agents in sustaining the SAS in Malaysia.This study enhances the understanding of the scope of tax agents’ involvement under the system. Findings from this study are predominantly positive and should be beneficial for policy makers in their efforts to review and modify current tax systems

Tax knowledge and compliance behavior under Self-Assessment System(SAS): perception of students from higher education in Malaysia

Tax non-compliance is a subject that has attracted substantial discussion not only within policy circles but also within the academia. The non-compliance issue is very important as the compliance rate will affect the revenue collection from taxpayers of a country. In view of the importance of tax compliance behavior, the present study aims at (1) examining the level of tax knowledge, attitudes and subjective norms, and intention towards tax compliance, (2) comparing the level of tax knowledge and the intention towards tax compliance between those with tax knowledge via formal tax education and those without formal tax education, and (3) investigating factors influencing tax compliance intention based on Theory of Reasoned Action. The study adopts a survey methodology and gathers a sample of diploma and undergraduate students from fourteen higher institutions of learning in Malaysia, a total of 417 were received and usable (92% response rate). In order to achieve the research objective, T-test, Pearson’s correlation analysis and multiple regression analysis were performed. The findings suggest that the level of tax knowledge among the students is moderate and those who have been exposed to formal tax education possess more tax knowledge. Similarly, those who have been exposed to formal tax education have higher intention towards tax compliance. The findings further reveal that tax knowledge, attitudes and subjective norms are significantly and positively correlated with intention toward tax compliance. It is further noted that, while tax knowledge is positively correlated with intention towards tax compliance, it lacks significance once the roles of attitudes and subjective norms are analysed in the multiple regression setting. Perhaps, tax knowledge plays an indirect role in shaping attitudes of the future taxpayers towards tax compliance intention. Instead, attitudes and subjective norms are found to be most influential and to have predictive ability for intention toward tax compliance. The result of the current study may contribute to policy makers, academics and tax administrators especially in developing tax education programmes to increase the awareness and tax knowledge among students (future taxpayers) and consequently, to enhance tax compliance rate and to reduce compliance cost

A cross-cultural study of religiosity and tax compliance attitudes in Malaysia and Turkey

Ensuring compliance in tax collection is very crucial as tax is one of the basic elements of public financing in almost all countries. The issue of compliance in tax research has been explored over many years from different perspectives. Initially, it started with a negative assumption of taxpayers’ compliance attitudes and recently the research has shifted to a more positive attitude of taxpayers. One of the factors that is expected to shape taxpayers’ compliance attitudes is religiosity. Even though a number of studies have started to explore this issue recently, not many studies have used primary data because the majority of the studies were relying on secondary data. Therefore, this study is comparing the impact of religiosity and its components on both tax compliance components, voluntary and enforced tax compliance, in Malaysia and Turkey. Surveys distributed to individual taxpayers were used in both countries. Religiosity is found to have a significant impact on voluntary tax compliance that influences taxpayers’ positive attitudes in both countries. Even though religiosity seems to be an influential factor with respect to tax compliance behaviour, this study has shown that in certain circumstances, it might appear irrelevant

The role of tax agents in sustaining the Malaysian tax system

Abstract In Malaysia, a self-assessment system has been implemented for all companies for more than a decade. The system necessitates corporate taxpayers to declare and calculate accurate sources of income, estimate income tax payable, keep records for audit purposes, and comprehend income tax legislation. In complying with these demands, many corporate taxpayers have to depend on the assistance of tax agents. Using survey data, this study aims to examine the role of tax agents in sustaining the SAS in Malaysia. This study enhances the understanding of the scope of tax agents' involvement under the system. Findings from this study are predominantly positive and should be beneficial for policy makers in their efforts to review and modify current tax systems

Konsep Inovasi dalam Islam Menurut Pandangan Asatizah Inovatif: Innovation Concept in Islam Based on Innovative Asatizah

Pelbagai kajian dilakukan mengenai konsep inovasi dalam Islam, namun fokusnya adalah pada Allah sebagai Inovator, Rasulullah sebagai inovator serta rumusan al-Quran mengenai kaedah mendapatkan pengetahuan untuk berinovasi. Tidak ditemui kajian dilakukan yang memberi fokus kepada ciri inovasi dalam Islam. Oleh itu kajian ini dijalankan dengan tujuan untuk merumuskan ciri inovasi dalam Islam. Kajian kualitatif ini dijalankan dengan mengumpul data daripada temu bual dan analisis dokumen. Seramai tujuh asatizah inovatif dipilih sebagai peserta kajian. Dapatan menunjukkan terdapat tujuh tema bagi konsep inovasi dalam Islam, iaitu; 1) tidak sempurna, 2) ilham milik Allah, 3) manfaat bagi orang lain, 4) patuh syariat, 5) sesuai dengan keperluan, 6) rai metod tradisional, dan 7) dihasilkan dengan ikhlas

Analysis of self-hisbah factors on moral appreciation among Muslim secondary school students in Malaysia : Fuzzy Delphi method application

The issue of moral deterioration among secondary school students still transpires due to the lack of moral appreciation among them. It is caused by the practice of self-hisbah, which is not attended in an istiqamah (steadfast) manner. The factor of self-hisbah potentially impacts the appreciation of the morals of Muslim students. This research aimed to analyse the self-hisbah factor by examining the expert consensus on the elements found in the self-hisbah factor. The researchers chose elements of the hisbah of heart and soul, hisbah of lust, and hisbah of behaviour. This study employed a quantitative approach that surveyed the views and evaluations of 14 experts selected by purposive sampling. These experts evaluated three (3) elements and twenty (20) items included in the Model of Moral Appreciation of Muslim secondary students. The researchers analysed the obtained data using the Fuzzy Delphi method. The analysis considered the triangular Fuzzy Numbers and the ranking of elements obtained through Defuzzification. The study data confirmed that the response and expert consensus on all elements were good. In essence, expert consensus exceeded 75%, and almost all threshold values ’d’ met consensus conditions. This analysis contributes to the theory of hisbah. Internal hisbah signifies the power to act emerges from oneself due to a process of self-evaluation known as hisbah. The practice of self-hisbah delivers a person who is always disciplined and strives to do good and refrain from doing evil in his daily life as a student. This theory is pertinent to be included in the Model of Moral Appreciation of Muslim Students’ secondary schools in Malaysia. A quantitative study is germane to be conducted on secondary school students throughout Malaysia to examine the usability of the model