A study on shared characteristics towards payment non-compliance among individuals with business income

This research studies on payment non-compliance among individuals with business income due to the growing concern of its increasing trend over the past years, which contributes to the outstanding tax debt for Inland Revenue Board of Malaysia (IRBM). The research aims at meeting the objectives of examining the shared characteristics towards payment non-compliance, identifying the significance difference between
payment non-compliance and aggregate income, as well as determining the significance difference between payment non-compliance, tax agent and tax return. A sample of 365 payment non-compliance individuals with business income were taken from seven IRBM branches. The study has identified seven shared characteristics among the individuals such as payment non-compliance range, tax return, penalty subsection 112(3) ITA 1967, penalty subsection 113(2) !TA 1967, raise type, aggregate income range and tax agent. Each characteristic were further analyze by way of descriptive analysis. On the other hand, the Analysis of Variance (ANOVA) and Independent
Samples T-test were used to prove the existence of significance difference between the intended variables. The study highlights significance findings, followed by
recommendations that can be considered as part of the tax administration strategies and action plans. The findings highlighted the positive impact of tax agents' appointment
that led to a lower rate of penalties under subsection 112(3) and 113(2) ITA 1967. The recommendation would be for the IRBM to continue the effort of ensuring high quality tax agents are in place due to their role as an extension arm to the IRBM in guiding and advising the taxpayers. In conclusion, understanding the shared characteristics towards payment non- compliance among individuals with business income will help the government as the custodian of tax policy of the country as well as the IRBM as the agent to collect direct taxes, to implement effective strategies towards increasing compliance and reducing tax avoidance.