Determinants of intention to use online monthly tax of deduction (e-MTD) system : a study on micro and small enterprises

Inland Revenue Board of Malaysia (IRBM) had ventured in a number of technology initiatives to increase its online services to taxpayers. These online services include online tax payment, online tax submission, and stamp duty assessment and payment system. Monthly Tax Deduction Online System (e-MTD) is one of the services provided by IRBM to help organisation, especially micro and small enterprises, to submit Monthly Tax Deduction (MTD) for their employees. However, the usage rate of this service by the employer is still low. The reasons for the low usage are yet to be known. To-date, there are no specific studies done to overcome this problem. This study is, therefore, carried out to identify the factors that affect the intention of micro and small enterprises to use the e-MTD.
The research model is developed based on the Diffusion of Innovation (DOI) theory. Three factors, namely, relative advantage, compatibility, and complexity are hypothesised to affect the micro and small enterprises’ intention to use e-MTD. These factors are selected because they were consistently found significant in prior studies of technology innovations.
Data were gathered via survey questionnaires distributed to a total 470 micro and small enterprises within Petaling Jaya district, both using mail and direct visit. A total of 106 questionnaires were completed and returned. Hence the response rate is 23%. After data cleaning process, only 72 data were eligible to be used for final analysis.
Findings of the study show that micro and small enterprises’ intention to use e-MTD is significantly affected by relative advantage and complexity. On the other hand, compatibility has no significant effect on the intention to use e-MTD. The result also reveals that small enterprises are more likely to use e-MTD compared to micro enterprises. The findings of this study could be used by IRBM to understand the behaviour of the targeted user of e-MTD, namely micro and small enterprises. By understanding the factors, IRBM can plan the right strategy to promote the e-MTD by the users which in return will be beneficial in time and cost savings. It can also be useful to other government agencies that provide online services to employers. This study adds to current literature on intention to use technology from the organisation perspective.