Asian Academy of Management Journal

Asian Academy of Management Journal, Vol. 11, No. 2, 73–88, July 2006


Jeyapalan Kasipillai1
and Hijattulah Abdul Jabbar2

School of Business, Monash University Malaysia
2, Jalan Universiti, Bandar Sunway, 46150 Petaling Jaya,
Selangor Darul Ehsan, Malaysia
Faculty of Accountancy, Universiti Utara Malaysia, 06010 Sintok,
Kedah Darul Aman, Malaysia
e-mail: 1
[email protected]


The purpose of this study is to investigate whether gender and ethnicity differences occur
in relation to tax compliance attitude and behavior. Prior studies on tax compliance have
focused little on gender as a predictor of compliance. In Malaysia, ethnic background of
a taxpayer could be a major determinant of tax compliance. A personal interview
approach is used to obtain information from taxpayers in urban towns. A t-test suggests
that males and females were found to have similar compliant attitude. As for ethnicity, a
similar result was observed. Results of a regression analysis indicate that gender,
academic qualification, and the person preparing tax return were statistically significant
as determinants of non-compliant attitude. In terms of compliant behavior, a regression
analysis revealed that “attitude towards non-compliance” and “receipt of cash income”
were two significant explanatory variables of tax non-compliance behavior of
understating income knowingly. The findings of this study are useful for policy
implications in identifying groups that require additional attention to increase voluntary
tax compliance.

Keywords: tax compliance, non-compliance, tax avoidance, tax evasion


Research on tax compliance cuts across numerous disciplines such as accounting,
economics, political science, public administration and psychology. It is
generally accepted that tax non-compliance exists everywhere (Kasipillai, Baldry,
& Rao, 2000). Tax evasion is a universal problem. This has led tax authorities
worldwide to be interested in reducing tax non-compliance and maximizing
voluntary compliance rates (Pentland & Carlile, 1996; Horton, 2003). Concern
about the decline in voluntary tax compliance has led to numerous studies on this
issue of level of compliance (Reckers & Sanders, 1994; Ghosh & Crain, 1995;
Brand, 1996; Tibiletti, 1999; Yaniv, 1999; Bishop, 2000; Loo, 2006). Deliberate
non-compliance is a perennial problem worldwide. For example, in the United

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

74 States (US), the estimated sizes of tax gap were US$280 billion in 1998 and
US$312–353 billion in 2001 (General Accounting Office GAO, 2005). Tax gap
is the measure of the difference between total tax collected and what should have
been collected. It may be classified as underreporting of income, underpayment
of taxes, and non-filing of returns (McManus & Warren, 2006). Quantifying the
tax gap provides a clue of total unpaid taxes and from whom it should be
collected. Using monetary approach of Tanzi (1983), Kasipillai (1997) estimated
that tax evasion accounts for an average of 20 percent of actual income tax
collection in Malaysia over a 25-year period ending 1994. Although precise
estimates of tax evasion for the years 1995 to 2005 are not available, but Inland
Revenue Board (IRB) figures show that almost RM402.5 million of unpaid taxes
(inclusive of penalties) were recovered from investigations activities for the
period of 1995 to 2002. In addition, another RM324.4 million was recovered
from audit1
activities for the period of 1997 to 2002 (IRB, 2000–2002).

This study in a specific but growing area of importance is indeed timely as the
self-assessment regime in Malaysia relies heavily on the tax compliance behavior
of taxpayers. In 2005, individual taxpayers were required for the first time to file
their tax returns under the self-assessment system (SAS). The Malaysian tax law
stipulates that individuals who derive income in a particular calendar year are
required to file their tax returns by 30 April of the following year. For income
derived in 2005 calendar year, assessments should be filed by 30 April 2006.
The numerous reasons and motive for complying or not complying need to be
looked into with a view to understanding and taking a variety of measures to
bolster compliance as well as confidence in the tax system. Gender is one
significant factor affecting tax compliance attitude and behavior of taxpayers
(Jackson & Milliron, 1986). In a multiracial country like Malaysia, ethnic group
might also be an important factor that effects tax compliance attitude and

In attaining a higher level of voluntary compliance, the Malaysian tax authorities
traditionally recognises the deterrence effect of penalties and enforcement
activities as well as undertaking criminal proceedings against tax defaulters
(Shanmugam, 2004) rather that negotiating for settlements (Yong, 2005). These
strategies however, are appropriate for tackling intentional non-compliance but
there may be other factors influencing taxpayer compliance behavior for which
these strategies may be inadequate. Given the foregoing background, it is
imperative that this study focus on carrying out research into compliance
behavior of individuals so as to enable the government to take appropriate
measures to ensure that the self-assessment of taxation function effectively in line
with the objective of providing efficient and effective services to taxpayers in
meeting their obligations. This study attempts to investigate the existence of

Gender and ethnicity differences in tax compliance
75 differences in tax compliance attitude and behavior (if any) among gender and
ethnic groups2
. Specifically, the objectives of this study are to determine:

i. whether gender and ethnicity factors influence tax non-compliant
ii. whether gender and ethnicity factors influence prior reported tax evasion
behavior; and
iii. whether gender and ethnicity factors influence non-compliant behavior.


Measuring tax evasion provides an important tool to detect and evaluate the
effectiveness of compliance enforcement policies, and to gauge the efficiency of
tax administration. Following the introduction of SAS, the IRB is more
concerned with taxpayer compliance and it needs to address varying groups of
taxpayers differently. Colemen and Freeman (1997) found out that taxpayers
would respond more favorably to messages and strategies that explicitly take into
account cultural, economic and even gender differences. Their views were
confirmed by a similar study carried out by Lin and Carrol (2000).

Thus, the findings of this study are useful for policy implications in targeting
groups that require tax education programs to increase voluntary tax compliance
through education under the SAS.

This paper is organized as follows. After the introductory part, the next section
surveys prior literature as a basis for developing the theoretical framework. The
survey design and data collection process are outlined in section three. The fourth
section covers the results and the final section concludes and offers direction for
further analysis.


According to Hasseldine (1999), many tax agencies have used various techniques
to measure the extent of non-compliance, but there will always be some
compliance dependent on the social attitudes and behavioral aspects of taxpayers.
Moreover, the extent of non-compliance among individual taxpayers not only
depends on individual factors, but on a complex combination of circumstances.

Non-compliance represents the most inclusive conceptualization with respect to
the failure to meet tax obligations whether intentional or unintentional (Kinsey,
1985). Tax evasion however, involves some elements of fraudulent conduct

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

76 accompanied by a real intention on the part of the taxpayer to wilfully or
deliberately mislead, deceive or conceal from IRB to pay less tax than actually
In general, non-compliance may take several forms and they include:

i. failure to submit a tax return within the stipulated period or non-
ii. understatement of income;
iii. overstatement of deductions; and
iv. failure to pay assessed taxes by the due date.

This study focuses on deliberate non-compliance, that is, having an intention to
evade tax. Previous studies on tax compliance revealed that the main factors
affecting non-compliance include high tax rates, probability of detection,
complexity of the law and the methods employed to collect taxes (Clotfelter,
1983; Kasipillai, 1997). As stated earlier, Jackson and Milliron (1986) found that
gender is one significant factor that affects the tax compliance attitude and
behavior of taxpayers. Past studies have shown that females were more
responsive to conscience appeal than sanction threat, both of which were
designed to improve tax compliance (Jackson & Jaouen, 1989; Hite, 1997).
Although the results of prior research are mixed or signify little consistency on
gender as a predictor of compliance, but most of the recent research provide
evidence on gender differences in relation to tax compliance (Cohen, Plant, &
Sharp, 1998; Hasseldine, 1999; Jackson & Milliron, 1986; Powell & Ansic, 1997;
Roth, Scholz, & Whitte, 1989). Ethnicity was considered to be one of the
determinants in a study by Chan, Troutman, and O’Bryan (2000). Chan et al.
(2000) explored the similarities and differences in taxpayer compliance behavior
between Chinese taxpayers in the US and Hong Kong. They recommended that
in order to improve taxpayer-compliance, cultural differences among taxpayers
must be taken into account. In terms of ethnicity, Dornstein (1976) stressed that
taxpayer behavior is a compound concept that has several elements including
ethnic background, length of residing in the country and age. Song and
Yarbrough (1978), and Aitken and Bonneville (1980) offer some evidence of the
level of tax compliance being higher among whites than non-whites in the US.
While, in the area of ethical decision making, Shafer and Park (1999) in
investigating cultural differences in ethical decision making among Asians,
Caucasians and Hispanic students in the US found significant difference between
ethical judgment among Asian and Caucasian students. In the Malaysian context,
J. Goodwin and D. Goodwin (1999) in comparing ethical judgment between
business students from Malaysia and New Zealand noted that even among Asian
societies, they are likely to be differences in ethical judgment. Abdul Wahab, Che
Ahmad, and Mat Udin (2004) in investigating ethical judgment of accounting
students also has used ethnic group as one of their demographic variables. They
envisaged ethical decision making to reflect judgment in resolving moral

Gender and ethnicity differences in tax compliance
77 dilemmas related to accounting aspects, including taxation and found significant
difference between prescriptive and deliberative moral reasoning behavior.
Sendut (1991) explains that the effect of race (ethnicity) possibly is significant in
a multicultural society where each ethnic group prefer to maintain their ethnic
identity. This study, therefore, incorporates ethnic group as a major determinant
of tax compliance behavior.

In the area of taxation, though a number of studies (e.g., Mottiakavander et al.,
2003; Loo, 2006) used ethnic groups as one of their demographic variable, but a
study by Kasipillai, Aripin, and Amran (2003) used both gender and ethnic
groups, together with other demographic variables to evaluate the influence of
education on tax compliance among undergraduates in Malaysia. They found
significant differences existed among ethnic groups over time but failed to
provide evidence of any significant differences in attitude between males and
females. We expect a mixed behavior pattern among the ethnic groups in
Malaysia. Available data suggest that the Malaysian tax-paying public comprises
of Malays (50%), Chinese (38%), Indians (8%) and others (4%).

Factors affecting non-compliance can be categorized into two: tax and non-tax
categories (see Fig. 1).

Figure 1. Factor affecting non-compliance

Source: Adapted from Kasipillai (2001)

Tax determinants are factors within the tax system and they include collection
machinery, penal system and tax rate. Non-tax determinants come into being
from outside the tax system and affect the decision of an individual in complying
with tax law. The non-tax determinants can be further sub-divided into micro
factors and macro factors. Micro characteristics include gender, ethnic group,
occupation and educational background. Macro determinants relate to the
attributes of the economy as a whole and these include price control and Tax (Tax structure; penal system; probability of
detection; complexity; collection machinery) Non-tax (Outside tax system) Micro factors (Qualities of taxpayer) Macro factors (Relate to economy as a whole) Factors affecting non-compliance

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

78 government income policies. This research, confines its study to micro factors
such as gender and ethnic groups, influencing compliance behavior of individual
taxpayers. There is also a difference between evasion and non-compliance
whereby the latter includes unintentional errors that is not meant to deceive the
revenue authorities. This study focuses on deliberate non-compliance, that is,
having an intention to evade tax. It also investigates the extent to which gender
and ethnicity factors influence tax compliant attitude and behavior.


The survey instrument was adapted from Hasseldine (1999) with some
modifications to suit the Malaysian context. Initially, the survey instrument was
pretested on a group of 30 staff members of Universiti Utara Malaysia (UUM)
with a view of refining the questions. Every step was taken to ensure that the
final instrument was clearly understood by the respondents.

The questionnaire was divided into four sections (referred to as sections A to D).
Section A consisted of 15 items that measure non-compliant attitude. Thirteen out
of the 15 items were adapted from Roberts (1994) and Hasseldine’s (1999)
approaches, while the remaining two new items were considered vital to
incorporate local content. One of the vital items related to the implementation of
SAS and the other covered instalment payments under the monthly tax deduction
scheme. Section B consisted of four items that measures non-compliant self-
reported prior evasion two of them were adapted from Hasseldine (1999).
Questions on this section refer to whether the respondents admitted “not fully
complying with the tax laws over the last three years”. Section C consisted of
two items that measure non-compliant behavior by providing hypothetical
scenarios. For Section A, the subjects were asked to indicate their agreement on
all items using a 7-point Likert scale (1 = perfectly acceptable to 7 = not at all
acceptable). While, for sections B and C, subjects were asked to indicate their
agreement on all items using a 7-point Likert scale (1 = definitely yes to 7 =
definitely no). Finally, section D addressed demographic and other information
concerning prior tax history of respondents.

Four trained research personnel carried out face-to-face interviews on individual
taxpayers who agreed to participate in this study. The trained personnel were
attached to the Research and Consultancy Centre of UUM and they collected the
data during a 2-month period in the first quarter of 2003. A mail survey would
not have been appropriate as the nature of the present study entails soliciting
responses involving personal tax matters. This study involved taxpayers from all
major urban towns located in the northern states of Peninsular Malaysia, namely,
George Town, Alor Setar, Kulim, Sungai Petani and Kangar. The racial

Gender and ethnicity differences in tax compliance
79 composition of these states broadly represents the composition of Malaysia as a
whole (Yearbook of Statistics, 2002). Five hundred individuals were randomly
identified from a local telephone directory for the purpose of determining the
probable respondents. Out of the 500 respondents who were identified, only 156
were willing to be interviewed by way of responding to a structured
questionnaire. However, only 153 (30.6%) responses were considered useful for
the purpose of this study, as the remaining three were excluded due to incomplete
data. The response rate is reasonable when compared to similar studies by
Hasseldine (1999) (response rate of 59%) and Hasseldine, Kaplan, and Fuller
(1994) where the response rate was 31 percent.


A summary of the characteristics of respondents is reported in Table 1 while prior
tax information of respondents is presented in Table 2. Table 3 displays the
mean scores for non-compliant attitude while Table 4 highlights the mean score
for each non-compliant behavior item. Table 5 presents a summary of the
regression output.

Profile of Respondents

It was found that the large majority of the respondents (76.5%) were aged less
than 46 years (see Table 1). About 54 percent of the respondents were Malays,
31.4 percent Chinese and the remainder were Indians. The majority of the
respondents were married (82.4 percent) and in terms of gender, 52.9 percent of
the sample were females. As for their occupational groups, 52.3 percent was
employed in the government sector, while 47.7 percent in the private sector.

In addition to the demographic information, the interview solicited information
on prior tax information of the respondents. The results are depicted in Table 2.

It was found that 73.9 percent of the respondents prepared their own tax return,
15.7 percent were assisted by their friends while the remaining 10.4 percent were
prepared by tax professionals. In terms of frequency of cash received (other than
principal income) during the last five years, only 14.4 percent received cash on
more than 10 occasions, 19.0 percent between one to five times, 3.9 percent
between six to 10 times while the remaining majority had never received cash
payment. The vast majority of respondents (88.2%) indicated that the IRB had
never queried them.

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

80 TABLE 1

Frequency Percent Age (years) Below 35 59 38.6
36–45 58 37.9
46–55 29 19.0
Above 55 7 4.5
Ethnic composition
Malays 82 53.6
Chinese 48 31.4
Indians 23 15.0
Others – –
Male 72 47.1
Female 81 52.9
Nature of main employment
Private sector 73 47.7
Government sector 80 52.3
Annual income
Up to RM24,000 43 28.1
RM24,001–RM48,000 75 49.0
RM48,001–RM72,000 25 16.3
RM72,001–RM120,000 9 5.9
Above RM120,000 1 0.7
Marital status
Single 27 17.6
Married 126 82.4
Up to SPM 20 13.1
STPM/Certificate 8 5.2
Diploma 16 10.5
Graduate/Professional 91 59.5
Post graduate 18 11.7 (n = 153)

Non-Compliant Attitudes

Roberts (1994) examined the role of television advertising in promoting
taxpayers’ compliance and fairness perception. In that study, the researcher used
factor analysis to construct and validate a non-compliance scale (cronbach alpha
of 0.93) consisting of subjects’ responses to several attitude items. In the present
study, the cronbach alpha of attitude towards tax non-compliance (EVSCALE)
was 88.5 percent suggesting that the survey instrument is reliable. In the survey
instrument, the range of possible scores is from minimum of one (suggesting an
extremely high threshold to evasion behavior, that is, very non-compliant
attitude) to a maximum of seven (suggesting a very low threshold to evasion

Gender and ethnicity differences in tax compliance
81 behavior, that is, an extremely high compliant attitude). The mean score for non-
compliant attitude (EVSCALE) was 4.61 out of 7.00 suggesting Malaysian
taxpayers are moderately tax-compliant (see Table 3).


Frequency Percent Tax return preparer Taxpayer himself 113 73.9
Assisted by friends 24 15.7
Tax professional 16 10.4
Ever queried by IRB
Yes 18 11.8
No 135 88.2
Frequency of cash received
None 96 62.7
1–5 times 29 19.0
6–10 times 6 3.9
Over 10 times 22 14.4 (n = 153)


Question asked Mean SD · NON-COMPLIANCE ATTITUDE EVSCALE* 4.61 1.13 1. If one is paid in cash for a job and then not reporting it in the tax
return: 5.25 1.74 2. Under the Self-Assessment System, a tax return by taxpayer will be
accepted as notice of assessment. Consequently, it is not wrong to
omit or understate your taxable income: 5.04 1.74
3. The probability of being audited is so low that it is worthwhile to
understate a little on your taxable income: 4.93 1.62
4. It is all right to occasionally understate certain income or claim a
disallowable expense if you are generally a law-abiding individual: 4.82 1.74
5. Failing to declare some earnings from investments or commissions
that the Inland Revenue Board would not be able to find out is: 4.80 1.74
6. Income tax rates are just too high, so it is not really cheating when
you interpret the rules a little to find ways to pay less than you are
supposed to: 4.80 1.82
7. When you know you deserve a deduction that you are not entitled
for, it makes sense to replace it with some other deduction which
IRB would not easily trace: 4.77 1.77
8. Declaring your principal income fully, but intentionally not
including part-time income is: 4.71 1.78 (Continued on next page)

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

82 TABLE 3 (continued)

Question asked Mean SD 9. It is not so wrong to understate some income since it does not really
hurt anyone: 4.71 1.82 10. Under the Scheduler Monthly Tax Deductions Scheme, income tax
is deducted monthly by the employer, hence, it is okay not to
declare and pay anymore income tax: 4.68 2.04
11. It is not so wrong to declare less on taxable income since the
government spends too much on extravagant projects: 4.54 2.01
12. As several businessmen pay no income taxes at all, if someone like
you understates a little, it is not a big deal: 4.48 1.99
13. With the high cost of goods and services these days, it is okay to
claim more expenses to help make ends meet: 4.17 1.87
14. Bartering goods with a friend and not reporting it on your tax return
is: 3.73 2.01
15. When you are not really sure whether or not an expense is
allowable, it makes sense to claim the deduction anyway: 3.68 1.79 (n = 153)
* Measured by the 15 individual items

Differences in Tax Non-Compliant Attitude

This section highlights gender and ethnicity differences towards tax non-
compliant attitude. In terms of gender, a simple mean comparison indicates that
females (mean score of 4.77 and SD = 1.09) are more compliant than males
(mean score of 4.42 with SD = 1.17). However, statistically, the t-test does not
reveal significant differences in attitude towards non-compliance between males
and females (F = 0.525; P = 0.0570). This particular result suggests both males
and females are found to be having similar compliant attitude. One possible
explanation could be due to their similar attitude and perception towards the
Malaysian tax system.

From an ethnicity perspective, a simple mean comparison reveal that Chinese
(mean = 4.90; SD = 1.09) and Indians (mean = 4.73; SD = 1.17)) were more
prone to comply with tax laws than Malays (mean = 4.40; SD = 1.16). However,
a one-way ANOVA does not indicate significant differences between ethnic
groups towards non-compliance attitude (F = 3.174; P = 0.055).

Determinants of Non-Compliant Attitudes

A regression analysis was carried out to test the determinants of taxpayers’
attitude towards non-compliance (EVSCALE). The independent variables
included were taxpayers’ demographic information (as reported in Table 1) and
their prior tax information (as reported in Table 2). The results indicate that the

Gender and ethnicity differences in tax compliance
83 model was statistically significant (adjusted R2
= 0.061; F= 1.993; P = 0.038).
The statistical outcome suggests that three variables, namely gender (b = 0.189;
P = 0.032), academic qualification (b = 0.184; P = 0.047) and tax preparer
(b = 0.194; P = 0.034) were strong predictors of attitude towards non-compliance
compared to four variables (gender, age, income level and whether the
respondent had ever received cash income) established by Hasseldine (1999). The
gender variable was found to be significant by Hasseldine (1999) as well as in
this study.

Non-Compliance Behavior

Table 4 highlights the mean score for each non-compliant behavior item. The
following discussion deals with data gathered from Sections B and C of the
survey instrument. For self-reported evasion behavior, the questions queried as to
whether non-compliance behavior had occurred in the last three years with higher
mean scores indicating more compliant behavior. Overall, the prior reporting
mean score reveal that Malaysian taxpayers generally have positive compliance
behavior (with lowest mean of 5.05). Contrastingly, for hypothetical evasion
questions, lower scores indicate more compliant behavior. Responses towards
including part time cash income received in a tax return and claiming extra
deductions that was not allowed indicate a neutral stand (mean score around 3.50
out of 7.00).


Mean SD Self-reported evasion behavior Understate income knowingly 5.35 1.98
Overstate income knowingly 5.59 1.75
Overstate deduction 5.46 1.85
Understate deduction 5.05 2.09
Hypothetical evasion behavior
Include extra part-time income 3.54 2.09
Claim disallowable expenses 3.76 2.04 (n = 153)

Differences in Tax Non-Compliance Behavior

A two-independent t-test and a one-way ANOVA were carried out to determine
the self-reported evasion behavior varies with gender and ethnic groups,
respectively. In terms of gender, t-test reveals that significant differences
(P < 0.05) exist in relation to overstatement of deductions, understatement of
deductions and claiming disallowable expenses. In all three situations, females

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar

84 were found to be consistently more compliant than males. Meanwhile, the
ANOVA analysis did not reveal any significant differences among ethnic groups.

Determinant of Evasion Behavior

A regression analysis was carried out separately for each of the six non-compliant
behavior (four self-reported evasion behavior and two hypothetical evasion
behavior). The independent variables included were those relating to
demographic information, prior tax information of the taxpayers and also the
non-compliance attitude (EVSCALE). The results of the regression are depicted
in Table 5.

The regression model was only significant in relation to understatement of
income knowingly. Two variables, namely EVSCALE (b = 0.321; P = 0.000) and
receipt of cash (b = –0.177; P = 0.037) were significant (P < 0.05). The results
suggest that high compliant attitude and unavailability of cash receipts were
associated towards high compliant behavior of taxpayers.


(%) Adjusted
(%) F
value P
value Std.
Error Self-reported evasion behavior Understate income knowingly 22 15.9 3.621 0.00*
Overstate income knowingly 9 2.00 1.284 0.239 1.73
Overstate deduction 7.8 0.60 1.086 0.376 1.84
Understate deduction 4 3.40 0.540 0.873 2.13
Hypothetical evasion behavior
Include extra part-time income 5.4 2.00 0.734 0.705 2.11
Claim disallowable expenses 9.7 2.70 1.382 0.188 2.01 (n = 153)
* Significant at 0.05 level


This study had delved into a complex subject by investigating the existence of
differences in tax compliance attitude and behavior among gender and ethnic
groups in northern Malaysia. The survey instrument was adapted from
Hasseldine (1999) and Roberts (1994) with some modifications to suit the
Malaysian environment. This study highlights that attitude towards compliance
was moderately high in Malaysia. The findings suggest that both males and
females are found to be having similar compliant attitudes. Even though the
results were not as expected, it was not surprising since Jackson and Milliron
(1986) have also indicated mixed results on gender as a predictor of compliance.

Gender and ethnicity differences in tax compliance
85 In terms of ethnicity factor, this survey does not show significant differences
among ethnic groups on the overall non-compliance attitude.

This study also seeks to find out the determinants of non-compliant attitude and
determinants of six separate specific non-compliant behaviors (two of them are
hypothetical in nature). A regression analysis shows that the two models are
significant, that is, determinants of non-compliance attitude and the determinants
of understating income knowingly. Three independent variables, namely gender,
academic qualification and tax preparer were found to be significant in
determining the attitude towards non-compliance. However, attitude towards
non-compliance and receipt of cash income influenced "understating income
behavior". This study suggests that gender; academic qualification and tax
preparer do directly influence compliance attitude and not the compliance
behavior. Thus, the IRB should emphasize on education programmes stressing
more on positive attitude towards tax compliance with different strategies that
take into account gender, academic qualification and tax professionals.

This study has the following two limitations. First, the taxpayer compliance
behavior is ascertained based on a hypothetical scenario. It is conceivable that the
actual consequences may differ from the elicited responses. Secondly, the study
is confined to five urban towns in the northern states of Peninsular Malaysia and
thus the generalizability of the findings may be limited. Ideally, future research
should cover towns in other regions. It could be equally important to ascertain
whether the findings of this study can be generalized to other jurisdictions in the
Asia-Pacific region where the tax-paying culture may substantially vary.


1. The IRB performed audit activities only commencing 1997 onwards.
2. It should be emphasized that "behavior" here is in the context of reported behavior which
may or may not be consistent with individual's actual behavior.
3. In the US, most taxpayers who are non-compliant simply "get it wrong" without any
intention to defraud (Long & Swingen, 1992). The main problem is ambiguity and complexity in
tax laws, which can make it difficult for even the most conscientious of taxpayers to fully satisfy
their legal obligations unless they take costly measures to obtain specialised advised from official
and unofficial publications, from tax professionals, or from tax authorities via 'tax hotlines' and the

Jeyapalan Kasipillai and Hijattulah Abdul Jabbar


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