Examining the determinants of tax arrears: Evidence from Malaysia

Hamid, Zarinah and Radzuan, Neazlin (2017) Examining the determinants of tax arrears: Evidence from Malaysia. International Journal of Accounting, Finance and Business, 2 (6). pp. 134-146. E-ISSN 0128-1844

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Abstract

The objective of this paper primarily aims to determine the factors influencing tax arrears amongst Malaysian tax payers by using demographic variables such as: age, gender, marital status, education, income and occupation as explanatory variables. It is conducted with an aim to complement prior research through exploring possible relationship between tax compliance behaviour and tax arrears. A number of previous literatures are cited in view to confirm the relationship among these variables. Based on the analysis of the available data, this study employs a multiple regression approach for 3,469 observations which are extracted from the national survey commissioned by IRB in 2011. A stepwise backward elimination method is utilized. The results show that gender, marital status, education and occupation are statistically insignificant at 5% level. Meanwhile two explanatory variables, i.e. age and income level are found to be statistically significant and able to explain tax arrears. Conclusion is then deduced that a negative relationship is observed between tax compliance behaviour and tax arrears. To improve future research, the use of secondary data is proposed for more accurate analysis. There is also an opportunity to broaden similar research to other tax related components and sectors which are still remained unexplored such as tax rates, audit probabilities and penalty structures.

Item Type:	Article (Journal)
Additional Information:	728/61738
Uncontrolled Keywords:	Tax arrears, Malaysia, Individual taxpayers
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HJ Public Finance H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Dr. Zarinah Hamid
Date Deposited:	01 Feb 2018 09:37
Last Modified:	01 Feb 2018 09:37
URI:	http://irep.iium.edu.my/id/eprint/61738

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