IIUM Repository (IREP)

Cash economy: tax evasion among SMEs in Malaysia

Mohamad, Azhar and Zakaria, Mohd Hasrol and Hamid, Zarinah (2016) Cash economy: tax evasion among SMEs in Malaysia. Journal of Financial Crime, 23 (4). pp. 974-986. ISSN 1359-0790

[img] PDF (full paper) - Published Version
Restricted to Registered users only

Download (157kB) | Request a copy
[img] PDF - Supplemental Material
Restricted to Registered users only

Download (132kB) | Request a copy

Abstract

Purpose – The purpose of this study is to investigate the relationship between tax evasion and certain demographic factors such as location, engagement of tax agent, size and type of small- and medium-sized enterprises (SMEs) industry in Malaysia. Design/methodology/approach – In this study, using proprietary tax audit data from the Inland Revenue Board of Malaysia (IRBM) on the 2011 tax returns of SMEs, the authors run a multiple regression analysis to examine the impact of location, agent, type of industry, size of enterprise and type of tax evasion on SMEs’ tax evasion in Malaysia. Findings – The authors find that tax evasion among SMEs in Malaysia is the highest when the business is located in a suburban environment and has no tax agent. Tax evasion is also influenced by the size of the SME (micro or medium). Originality/value – This study gives insight that the IRBM can use to aid its collection department in profiling SMEs that have a higher tendency to evade paying tax. Keywords Malaysia, SMEs, Tax evasion, Cash economy, Corporate income tax

Item Type: Article (Journal)
Additional Information: 3334/55059
Uncontrolled Keywords: Malaysia, SMEs, Tax evasion, Cash economy, Corporate income tax
Subjects: H Social Sciences > HB Economic Theory > HB522 Income. Factor shares.Interest.Profit.Entrepreneurship
H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr. Zarinah Hamid
Date Deposited: 01 Feb 2017 14:30
Last Modified: 04 Apr 2017 16:37
URI: http://irep.iium.edu.my/id/eprint/55059

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year