Essay on Tax Compliance
Noor Suhaila Shaharuddin (2012) & Mohd Rizal Palil (PhD). Tax Compliance: An Analysis On Tax Knowledge And Demographic Factors.
Empirical research on tax compliance has shown that knowledge of taxation is essential as determinants of tax behavior. In other words, to be tax compliant individual taxpayers need to possess some basic knowledge on personal taxation such as chargeability of income, exemptions, reliefs, rebates in order to compute tax liability correctly. Taxpayers are less compliant if they do not understand the basic concept of taxation. Thus, the purpose of this study is to examine the effect of tax knowledge in understanding the tax …show more content…
In contrast, under SAS, the onus for assessing tax liability has shifted to taxpayer (Junainah, 2002). That is, the new system require the taxpayers to determine their taxable income, compute their tax liability and submit their returns based on existing tax laws issued by the tax authorities. The self calculation of the tax liability is deemed accurate until the tax return is selected for verification by the tax authorities. They are also required to provide record that they may be reasonable to verify the returns submitted to IRB (Kasipillai, 2009). The introduction of SAS required taxpayers to possess adequate tax knowledge and understand the tax laws to fulfill their tax obligations voluntarily (Loo and Ho 2005). Empirical research on tax compliance has shown that tax knowledge is an essential aspect in determining taxpayer’s