This research has been carried out through questionnaires. According to Sekaran, a questionnaires survey is a formulated written set of questions to which respondents record their answers, usually within rather closely defined alternatives. The data were collected after the submission of tax return on 30 April 2008 and 30 June 2008 to the Inland Revenue Board (IRB). The first section is to test the perception of taxpayers’ satisfaction towards the tax authority which is the Inland Revenue Board (IRB). The questions are measured using a 7 point Likert scale ranging from 1 = strongly disagree to 7 = strongly agree, plus 8 for don’t know and 9 for not applicable. This questionnaire was adapted from the study conducted by Niemirowski et al, who have produced a paper that evaluate the tax related behaviour, belief, attitude and values of taxpayers compliance in Australia. Next section is to measure the level of knowledge on Self Assessment System towards level of compliance in Pahang, Kelantan and Terengganu. This instrument consists of “Yes”, “No” and “Not Sure” asking respondents regarding their knowledge on tax relief and “True”, “False” and “Not Sure” to indicate their understanding of deductible and non deductible expenses.
Data in this study is analyzed by using Statistical Package for Social Science (SPSS). The analysis consists of six parts, namely reliability testing, frequency analysis, descriptive statistic, correlation test, factor analysis and Chi-Square analysis.
The study would like to examine the relationship between satisfaction towards the services provided by the IRB and taxpayers’ knowledge on taxation with their level of compliance in submitting the tax return. This is based on previous research, which indicates that level of satisfaction will encourage the taxpayers to comply more and have negative relationship with tax evasion. In addition, previous researches also indicate that tax knowledge is very essential in order to increase level of tax compliance. Hence this study also would like to investigate the relationship between tax knowledge with tax compliance, where the level of compliance is measured in terms of timeliness in submitting the tax return If the taxpayers managed to submit before the deadline (30 June for businesses), they are considered as complied taxpayers, and vice versa. The framework of the study is depicted in Figure 1.
H1: There is significant relationship between satisfaction towards the services provided by the IRB and timeliness of submitting the tax return.
H2: There is significant relationship between knowledge on taxation and timeliness of submitting the tax return.
Reliability of a scale gives an indicator of how free it is from random error. One of the most commonly used statistic is Cronbach’s coefficient alpha, which is also being utilized in this study. It provides an indication of the average correlation among all of the items that make up the scale with values ranging from 0 to 1 and the higher value indicating greater reliability. According to Pallant, the ideal Cronbach Alpha coefficient of scale should be above 0.7. The following result from SPSS version 17 shows the reliability test for 30 questionnaires of the questionnaire. The Cronbach Alpha coefficient of scale shows 0.750, which is above 0.700. Therefore, this proves that the questions are reliable.