A study on firm characteristics on the tax noncompliance among large corporations in Malaysia

Tax revenue is a major source and contributor to the Government’s Fund for development and governing a nation. Therefore, tax non-compliance has always been a major concern to the majority of tax authorities around the world. Although many tax non-compliance studies have been conducted in the past, there were still limited
studies on corporate taxpayers’ non-compliance using actual tax audit data. This study was conducted to determine the significant difference between type of industries, type of tax agent, ownership structure, form of companies and financial liquidity towards tax non-compliance among large corporations in Malaysia. This study is a quantitative research and data used are secondary data from real tax audit cases resolved for the period from 2017 to 2019 audited by Special Branch of Inland Revenue Board of Malaysia (IRBM) consisting of Large Taxpayer Branch, Special Industry Branch and
Multinational Tax Branch. A total of 120 samples have been selected for analysis. Tax non-compliance was measured by the tax deficiency that was discovered during the tax audit. To obtain the results of the study, the Statistical Package for Social Sciences (SPSS) was used which consisted of descriptive statistics, normality test and mean
comparisons. The results showed that type of industries, type of tax agents, form of companies and also financial liquidity have a significant difference on tax noncompliance, whereas ownership structure have no significant difference. The findings of this study provided valuable input to IRBM to strengthen audit methods and
strategies to curb the tax non-compliance more effectively. In addition, this study also added value to the existing literature works in related to tax non-compliance.