Ethical perception on tax evasion by professional in Malaysia
Tax revenue is the main source of revenue to the government in order to sustain and develop the nation. Therefore, its erosion is detrimental to the economy. In order to combat with tax evasion in Malaysia, Self Assessment System (SAS) was introduced. However with SAS, tax compliance is not only a m...
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| Format: | Thesis |
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2012
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| Summary: | Tax revenue is the main source of revenue to the government in order to sustain and develop the nation. Therefore, its erosion is detrimental to the economy. In order to combat with tax evasion in Malaysia, Self Assessment System (SAS) was introduced. However with SAS, tax compliance is not only a matter of legal but it is also a matter of ethical choice that taxpayers face to participate in the tax system. Tax literature has recognized taxpayers’ perceptions and ethics as one of the important variables that can influence tax evasion decision. Nevertheless, few have studied on the taxpayers’ ethical perception towards tax evasion and the possible factors that impact on their perception towards tax evasion. Therefore, the purpose of this study is to replicate the work of previous researchers on ethics and tax evasion realm, in order to understand Malaysian professionals’ perceptions and reasoning on ethics to tax evasion as well as to examine the determinants (personal attributes and professional attributes) to ethical perception. A survey questionnaire was administered to professional groups from accounting, law, engineering, and medical, in Klang Valley area. The current finding shows that the selected Malaysian professionals perceived tax evasion as ethically justified, depending on circumstances. The strongest justification for tax evasion was if tax fund were misappropriated. In addition, other than the two perceptual dimensions towards ethics to tax evasion that was found in western countries, this study also found an additional dimension which is selfish motives dimension in Malaysia context. Furthermore, Malaysian professionals’ ethical perception towards tax evasion was found not only influenced by their personal attributes (demographic factor and personality traits) but also their professional attribute (e.g. code of ethics). Hence, both tax authorities and professional bodies should consider emphasizing educational measures that embrace ethical value and targeting groups that require additional attention and considerable tax education program in order to improve voluntary tax compliance. |
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