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

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

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

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

The role of tax agents is 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

Modelling attributes of corporate tax evaders using resolved audit cases

Reducing tax evasion is vital mainly because an “enforced compliance” policy is costly and often very expensive (OECD, 2008). Many tax administrations put an enormous effort into combating tax evasion. Available evidence suggests that tax evasion has been found to be particularly acute in many developing countries, including Malaysia. In the effort to reduce overall tax evasion, fairly and cost-effectively target tax audits by the tax authority are essential. This can be achieved should key business characteristics of tax evaders are identified. As suggested by previous studies, six variables had been examined to see whether they are associated with effective tax rate (ETR) of tax evader companies. The variables analysed are size, leverage, return on asset, capital intensity, inventory intensity and receivables. The study is using archival data from the Inland Revenue Board of Malaysia (IRBM), consists of 3,010 tax audited cases resolved by the Corporate Tax Branch of IRBM in 2012. Out of this number, 903 companies that were imposed with penalties of 45% or more are considered as the tax evaders. Findings from this study may assist the tax authority in developing strategies to reduce tax evasion. Consequently, a fairly and cost-effectively target tax audits can be accomplished

Determinants of corporate effective tax rate: The case of corporate tax evaders in Malaysia

Reducing tax evasion is vital mainly because an “enforced compliance” policy is costly and often very expensive (OECD, 2008). Many tax administrations put an enormous effort into combating tax evasion. Available evidence suggests that tax evasion has been found to be particularly acute in many developing countries, including Malaysia. In the effort to reduce overall tax evasion, fairly and cost-effectively target tax audits by the tax authority are essential. This can be achieved should key business characteristics of tax evaders are identified. As suggested by previous studies, six variables had been examined to see whether they are associated with effective tax rate (ETR) of tax evader companies. The variables analysed are size, leverage, return on asset, capital intensity, inventory intensity and receivables. The study is using archival data from the Inland Revenue Board of Malaysia (IRBM), consists of 3,010 tax audited cases resolved by the Corporate Tax Branch of IRBM in 2012. Out of this number, 903 companies that were imposed with penalties of 45% or more are considered as the tax evaders. Findings from this study may assist the tax authority in developing strategies to reduce tax evasion. Consequently, a fairly and cost-effectively target tax audits can be accomplished

Why do taxpayers comply: Evidence from Indonesia

This paper aims to identify the reasons used by taxpayers to become a compliant taxpayer, and whether these reasons are affected by demographic factors. Five reasons were used - fairness on the distribution of tax burden, fairness of the government in utilising government revenue, peer influence, sanctions and non-tax macro factors. Data was collected using questionnaire survey distributed to government officers in Pelalawan Regency, Riau Province, Indonesia. The results showed that fairness, peer influence and sanctions are among the reasons used by taxpayers when they decide to comply with income tax laws. The choice of these reasons are not affected by age, gender and level of study, except on fairness of the government in utilising government revenue