THE RELATIONSHIP BETWEEN PERCEPTIONS AND LEVEL OF COMPLIANCE UNDER SELF ASSESSMENT SYSTEM: Frequency Analysis

THE RELATIONSHIP BETWEEN PERCEPTIONS AND LEVEL OF COMPLIANCE UNDER SELF ASSESSMENT SYSTEM: Frequency AnalysisThe total numbers of respondents in Kelantan, Terengganu, Pahang and occupation of the taxpayers. 31.2 percent (n=62) feedback were received for Kelantan, 29.6 percent (n=59) were received for Terengganu and 39.2 percent (n=78) were received for Pahang. In terms of occupation, 65.8 percent (n=131) of respondents are sole proprietors, 14.1 percent (n=28) are partnership businesses and 20.1 percent (n= 40) are other types of occupation. The frequency of compliance by states. As a results, 37.8 percent (n=59) of taxpayers in Pahang complied with the requirement, which is to submit their tax return before 30 June. Whereby 35.3    percent (n=55) of respondents in Terengganu and 26.9 percent (n=42) of respondents in Kelantan complied with this requirement. In this section we discuss the relationship between levels of satisfaction towards services provided by the Inland Revenue Board (IRB) and levels of compliance. The results were obtained from their responses towards ten questions regarding service quality provided by the tax authority. Out of 10 questions, we find that there are four questions on satisfaction which have the relationship with level of compliance. The first significant question is “I am satisfied with the services provided by the IRB” (p value is 0.041) which represented overall satisfaction towards the services provided. Out of 156 complied respondents, 71% (n=111) are satisfied with the services provided by the IRB. Mean while for non complied respondents, out of 43 taxpayers only 55.8% (n=24) are satisfied with the services provided.

The next question on satisfaction that have the relationship between tax compliance is the statement of whether the “Time taken by the IRB to process my return is reasonable” (p value = 0.007) which represented the satisfaction towards the time taken by the IRB to process the tax return. 69.2% (n=108) of complied respondents are in the opinion that, the time taken by the IRB to process their return is reasonable. Compared to only 39.5% (n=17) of non complied respondents who are satisfied with the timelines of the process. The third significant statement is the “Time taken by the IRB to refund excessive tax paid is reasonable” (p value = 0.044) which represented the satisfaction towards the time taken to process the tax refund. 52.6% (n=82) of complied respondents are satisfied with the time taken with the IRB to refund their excessive tax paid. In comparison, only 23.3% (n=10) of non complied taxpayers perceived that the time taken by the IRB is reasonable. Finally, the fourth significant statement is the “Tax system should contribute to economic growth” (p value = 0.006) which represented the satisfaction towards contribution of tax to the growth of the economy. 84% (n=131) of complied respondents supported that the tax system should contribute to the growth of the economy. Mean while, 81.4% (n=35) of non complied respondents agree with the opinion. The Kolmogrov Smirnov-Z test has been used to determine the distribution of data. According to de Vaus, significant level of less than 0.05 indicates that the distribution of the data is not normal. The analysis shows that the significant level of all the variables is 0.00, hence the data is not normally distributed. The most appropriate correlation test for this type of data is Spearman’s rho (de Vaus, 2002). This test is important to determine the existence of any multicollinearity problem among the independent variables before the multivariate analysis could be performed. According to Cooper and Schindler, serious multicollinearity problem exists when the bivariate correlation score is 0.80 or greater. The result of the Spearmen’s rho correlation analysis, which indicates that there is no multicollinearity exists in the data.