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 gro...
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| Format: | Article |
| Language: | English English |
| Published: |
Emerald Group Publishing Limited
2014
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| Online Access: | http://irep.iium.edu.my/41383/1/Isa_2014.pdf http://irep.iium.edu.my/41383/5/41383_Tax_complexities_Scopus.pdf http://irep.iium.edu.my/41383/ http:/www.emeraldinsight.com/1754-243X.htm |
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| Summary: | 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. |
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