THE RELATIONSHIP BETWEEN PERCEPTIONS AND LEVEL OF COMPLIANCE UNDER SELF ASSESSMENT SYSTEM: IntroductionSelf Assessment System (SAS) has being introduced in Malaysia since 2001. Under the SAS, one of the objectives of the IRB is to achieve voluntary compliance by the majority of the taxpayers. In addition, it is also to institute effective enforcement through prevailing legal procedures. However, it is anticipated that a large proportion of taxpayers unable to complete their own returns due to lack of knowledge and understanding of SAS. Tax compliance can be defined as the degree to which a taxpayer complies or fails to comply with the tax rules of their country. It is accepted that the goal of an efficient tax administration is to foster voluntary tax compliance using all possible methods including penalties. Previous literature on tax compliance views tax compliance from three theoretical perspectives. The first theory perceived that tax non compliance is deterred by sanction. Second theory modeled tax compliance as a purely economic decision under uncertainty, and the third theory modeled tax compliance as a non economic such as demographic, attitudes and perception of compliance. In this study, we try to understand tax compliance by using the third model which suggests that tax compliance is influence by non economic factors. Hence, the objectives of this study are:
1)    To examine the relationship between satisfaction towards the services provided by the Inland Revenue Board (IRB) and tax compliance.
2)    To examine the relationship between knowledge on taxation and tax compliance.
3)    To determine factors that contributed to the satisfaction towards the services provided by the IRB.
In Self Assessment System (SAS), a taxpayer is required to assess his tax liability using a tax return in which he declares his gross income, allowable deduction and other. This tax return must then being filed with the tax authority together with payment for the tax liability computed in that return. The basis feature of a SAS is that it is the taxpayer rather than the tax liability. For a SAS to effectively implemented, there are certain critical factors that need to be consider which are the process of deciding which tax returns should be audited is crucial, non-compliance should be dealt with justly and swiftly to encourage the majority of taxpayers to comply and the education level of taxpayers is crucial in determining whether the SAS will work effectively.
Various countries have adopted this system in quite a long time. For example, Japan adopted the SAS in 1947 and after more than five decades the system is firmly established as part of the tax regime. The present SAS in Japan is a success story of the tax administration and is the result of their half century experiment. In order to enhance tax compliance, the Japanese tax administration provides its taxpayers with various services such as guidance, education, consultations and other. Whereas in Bangladesh, since the introduction of the SAS in 1981, there has been a positive response from the taxpayers and gradually the scheme began to show fruitful results. An increasing number of taxpayers fall within the tax net and the level of voluntary tax compliance and revenue collection revealed an upward trend. However, during the last few years which are from 1993 until 2000, the filling of tax return in Bangladesh under the SAS is still very low. The success or failure of the SAS, from the viewpoint of the tax administration, is ascertained from the amount of tax collected by the system.