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Tax Compliance Behavior Among Malaysian Taxpayers: A Dual-stage PLS-SEM and ANN Analysis

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  • Naeem Hayat
  • Anas A. Salameh
  • Abdullah Al Mamun
  • Mohd Helmi Ali
  • Zafir Khan Mohamed Makhbul

Abstract

The tax system provides the necessary financial resources to a country’s administration to use the collected resources for the welfare of the general public and the development of general infrastructure. Therefore, compliance with the prevailing tax system is necessary for a country’s political and administrative system to survive. The current study aims to explore the intention to comply and the compliance behavior toward the tax system among Malaysian taxpayers. The data were collected using the survey method, and quantitative data were analyzed using the dual-stage methods of partial least squares structural equation modeling (PLS-SEM) and artificial neural network (ANN). The analysis results showed that the perceived fairness of the tax system, tax penalties, and tax awareness were significantly related to the intention to comply with the tax rules and regulations. Furthermore, the intention to comply with the tax system significantly influenced tax compliance behavior. The ANN analysis confirms that tax awareness, tax penalties, and fairness perception are the three most important factors influencing tax compliance. The tax authorities need to build the taxpayers’ confidence in the prevailing tax system and streamline the tax system to reduce tax complexity. Consequently, the taxpayers will start paying the correct and timely tax liabilities. The study’s limitations and future research avenues are documented at the end of this paper.

Suggested Citation

  • Naeem Hayat & Anas A. Salameh & Abdullah Al Mamun & Mohd Helmi Ali & Zafir Khan Mohamed Makhbul, 2022. "Tax Compliance Behavior Among Malaysian Taxpayers: A Dual-stage PLS-SEM and ANN Analysis," SAGE Open, , vol. 12(3), pages 21582440221, September.
    • Handle: RePEc:sae:sagope:v:12:y:2022:i:3:p:21582440221127190
    DOI: 10.1177/21582440221127190
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    References listed on IDEAS

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    1. Rui Bruno Santos, 2023. "A Bibliometric Analysis between Communication and Tax Compliance," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(6), pages 321-334, June.

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