Relationship between size of company, type of industry and leverage with tax non compliance: the case of small medium corporations in Kuala Lumpur bandar branch

The increasing of tax non-compliance cases in Malaysia is a serious concern to tax authority in this country. Previous studies have shown that size of company, types of industry and leverage are among the factors that contributing to tax non-compliance. These three variables were chosen because they were among the major contributors to national revenue losses. Thus, this study examines the relationship between size of company, types of industry and leverage with tax non-compliance among small and medium corporations (SMCs) tax audited by Inland Revenue Board of Malaysia (IRBM). SMCs are chosen because they contribute immensely to Malaysian economic growth and indirectly will give impact to tax collection. Tax non-compliance indicator in this study is tax audit adjustment. The study used 2015 actual tax audit cases gathered from Department of Operation Tax, IRBM in Kuala Lumpur Bandar branch.Besides that, the data analysis techniques in this study comprise of descriptive analysis,correlation analysis and multiple regression analysis. It was found that company size and leverage have significant relationships with tax non-compliance. The finding also shows that type of industry have a relationship with tax non-compliance. The findings of this study may assist IRBM in identifying possible cases for audit in future.