Factors influencing compliance in monthly tax deduction (MTD) and personal income tax filing

This study aims to examine the relationship between Monthly Tax Deduction (MTD) and the compliance level in submitting Individual Income Tax Return Forms (BE Form) among salaried taxpayers. Although MTD was introduced in 1995 to reduce the lump sum tax burden and improve compliance, many individuals mistakenly perceive that MTD constitutes a final tax, leading to non-submission of the BE Form. Guided by the Theory of Planned Behaviour (TPB), this study investigates the influence of seven key factors—namely knowledge, attitude, subjective norms, awareness, ease of use, usefulness, and user satisfaction—on tax submission compliance. Data were collected through a structured questionnaire involving 110 respondents employed in the Klang Valley and Seremban, Negeri Sembilan areas. The findings indicate only usefulness have a positive influence on submission compliance emerging as the most significant predictors, while the other factors do not have a positive effect on compliance tendencies. The study recommends that the Inland Revenue Board of Malaysia (IRBM) intensify its tax education and awareness programes to enhance public understanding of the MTD mechanism and the importance of submitting the BE Form, thereby reducing instances of unintentional non-compliance