Customs Sales Tax Compliance: Manufacturer's Perspective

This study was conducted to explore the relationship between local sales tax compliance and manufacturer behavior among the manufacturer in Wilayah Persekutuan Kuala Lumpur. Manufacturer behavior and local sales tax compliance were treated as independent and dependent variables respectively. Manufacturer behavior measured with respect to manufacturer tax knowledge, fair perception in
tax system, tax system complexity and taxpayer perception on tax law and enforcement. Local sales tax compliance was measured with reference to enable them to register as licensee in Sales Tax Act 1972. A total of 169 respondents from the population of 178 manufacturer participated in this study. Data was collected through the distribution of questionnaires, which was designed to measure the manufacturers’ behavior with a statement on a five likert scale point, ranging from one (strongly disagree) to five (strongly agree). Four hypotheses were tested for this
study. Data was analyzed using the SPSS software to obtain the frequencies, means,median, standard deviation and correlations between variables. The results show that four independent variables have negative relationship with register as local sales tax licensee.