Individual tax payers’ tax compliance is influenced by several factors. One of the major factors, the Economic factor, is studied in this paper. Readings with similar topics emphasises that there still exists a gap in the developing countries. Malaysia is a multi-racial country with economic factors to influence on tax compliance. Some of the factors impacting are: probability of being audited, perception on government spending, perception on equity and fairness and penalty rates, which are considered to be playing an important role on individual tax compliance behaviour. The researcher used survey method of research design and targeted the individual tax payers across Malaysia as population. A sample of 419 respondents had been taken for this study, using convenient sampling method. Pearson correlation and multiple regression analysis had been employed to analyse the data. The results of the study disclose that probability of being audited, perception on government spending, penalty rate and an individual’s personal financial position are the main important variables that influence individual tax payers’ tax compliance behaviour in Malaysia. This paper studied economic factor variables, which finally fills the gap existed in the literature and contributes as a justification for policymakers.
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To cite this article: Sritharan, N., Salawati, S. (2019). Economic Factors Impact on Individual Taxpayers’ Tax Compliance Behaviour in Malaysia, International Journal of Academic Research in Accounting, Finance and Management Sciences 9 (2): 172-182
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