A STUDY ON THE MONTHLY TAX DEDUCTION AS THE FINAL TAX AMONGST MALAYSIAN SALARIED TAXPAYERS: THEORY OF PLANNED BEHAVIOUR APPROACH

Abstract

This study provides empirical evidence related to the effect of some factors towards the acceptance of the Monthly Tax Deduction (MTD) as the final tax. The MTD system is referred to as a no-return system. The purpose of such a system is mainly to reduce taxpayers’ burden and reduce tax evasion as well as increase tax collection. In Malaysia, the MTD as the final tax scheme for the salaried group of taxpayers is still new. Thus, the purpose of this study has been to determine the acceptance of the MTD as the final tax with the perspective of the theory of planned behaviour. Using the theory of planned behaviour (TPB) as the basis of this study’s framework, the useable data were collected from 150 salaried earners from Petronas Berhad and Inland Revenue Board of Malaysia. The data were analysed using SPSS. The findings from the multiple regression analysis revealed that attitude, subjective norms, and perceived behavioural control had significant positive effects on the Intention to accept the MTD as the final tax, whilst readiness was insignificant. Moreover, the results also indicated that attitude was the most influential factor. This study confirms the applicability of the TPB in the intention to accept the MTD as the final tax. The findings on the usage intention towards the MTD as the final tax and its determinants will also assist the IRBM in formulating strategies or mechanisms for improvement. Implications and recommendations for policymakers are also discussed.