The determinants of tax compliance behavior among individual taxpayers in Kedah, Malaysia

Tax compliance behavior among individual taxpayers is a critical aspect of a country's revenue collection system, directly impacting its fiscal sustainability and economic development. This study seeks to identify the factors that could influence taxpayers when making decisions regarding tax compliance and to determine the significant differences between demographic factors and tax compliance in Kedah, Malaysia. It examines ten determinants, which are classified into demographic, economic, psychological, and sociological factors. The demographic factors consist of gender, age, marital status, education level, and employment status. Economic factors encompass tax rates and tax penalties, while psychological factors involve perceptions of government and tax knowledge. Sociological factors, such as religiosity, are also considered in this research. The Fischer Model is used in this research. In achieving this objective, a non-probability sampling procedure and convenience sampling method are used to distribute the self-administered questionnaire which means that the participants would be who were most readily available and willing to participate in this research. The convenience sampling method was used as it was easily accessible by the participants and it provides a way to quickly gather preliminary data and generate hypotheses for further investigation. Besides, it was used due to time constraints in collecting the data. T-test, ANOVA, regression analysis, and Pearson’s correlation analysis are being employed in testing the differences and relationships among the independent variables and dependent variables. The results revealed that there are no significant differences between gender, age, marital status, employment status, educational level, and tax compliance. Religiosity, tax knowledge, tax rate, tax penalty, and perceptions of governments have a significant positive relationship towards tax compliance behavior. Hence, it is suggested that policymakers integrate religiosity, tax knowledge, tax rate, tax penalties, and perceptions of government into a comprehensive model to enhance understanding of individual taxpayers' compliance in Kedah, Malaysia. Emphasizing the significant factors uncovered in this study, policymakers can tailor strategies and policies aimed at improving tax compliance, potentially mitigating the issue of non-compliance in Kedah and across Malaysia.