Determinants of goods and services tax (GST) compliance: perception of royal Malaysian customs department officers in Penang

Former Malaysian Prime Minister, Dato' Seri Mohammad Najib bin Tun Abdul Razak has quoted that Goods and Services Tax (GST) has been the savior of the country’s economy. As the implementation agency, the role of Royal Malaysian Customs Department (RMCD) in collecting revenue from the consumptions taxes has then becomes more significant. It will be a challenging task for RMCD when the noncompliance is high as there will be leakage of government revenue. The main purpose of this study is to measure and examine the relationship between tax knowledge, tax attitude, complexity of the GST laws and GST compliance using Fischer Model. A total of 310 questionnaires were distributed to customs officers in Penang, which is a state office of RMCD. Data was collected through the distribution of questionnaires, which was designed to measure GST compliance in the perception of customs officers on a five likert scale point, ranging from one (strongly disagree) to five (strongly agree). The data for this study was analysed using the Statistical Package for Social Sciences (SPSS). The findings indicate positive and significant relationship between taxpayer's GST knowledge, taxpayer's attitude and GST compliance. Complexity of law however shows a significant negative relationship with GST compliance. Findings of the study hopefully can assist RMCD in drafting strategies to enhance the indirect tax compliance and to become a more efficient and effective tax administration.