A study of tax literacy among online businesses in Kota Kinabalu Sabah

Online business is mushrooming in this country. The great potential of this economic activity in generating the country's economy is undeniable. In fact, the government is constantly empowering facilities and infrastructure that can facilitate online business in the country. Nevertheless, the initiatives and efforts taken by the
government in empowering this sector does not reflect the level of compliance among online businesses in Malaysia. There are still many issues regarding tax compliance among online businesses which is influenced by many factors including their tax literacy and perception towards income tax. There are quite a number of
previous researches that studied tax system and acceptance among the taxpayers in Malaysia. However, there is a lack of studies that focuses on the level of tax literacy among online businesses towards income tax in Malaysia especially in the State of Sabah. Therefore, this study will identify the level of tax literacy among the online
businesses towards income tax in Kota Kinabalu City, Sabah. A total of 169 participants were involved in the interviews conducted in the city of Kota Kinabalu. The result is positive whereby the awareness level of tax literacy among online businesses in this district is high. Moreover, there is a positive perception on tax literacy among online businesses in Kota Kinabalu Sabah. The study suggests that IRBM will continue to strengthen tax education among online businesses in order to empower tax literacy, so that the tax reporting and declaration can be made accordingly with minimal errors in the future.