Determinants of tax compliance behaviour among e-commerce business owners in Malaysia

Abstract

The evolvement of the digital economy has provided everyone with opportunities to engage in e-commerce business activities. Despite the increased use of e-commerce in Malaysia, the Malaysian Inland Revenue Board (IRBM) identified problems of tax evasion and low tax returns, which resulted in losing millions in potential tax revenue. Based on the theoretical foundation of the Theory of Planned Behavior (TPB), this research aims to determine the effect of particular tax compliance variables on tax compliance behaviour among e-commerce business owners in Malaysia. The data collection was done among the e-commerce business owners registered under Malaysia Internet Entrepreneur Association (MIEA) throughout Peninsular Malaysia. Due to the unprecedented outbreak of Covid-19, the data collection was done via the online platform Google Form for four months, from June to September 2021. Two hundred eighty respondents had completed the online questionnaire. The finding suggests that attitudes toward informal sanctions, attitudes toward formal sanctions, and subjective norms may influence the intention of tax compliance among e-commerce business owners. However, perceived behavioural control do not significantly predict tax intention. Results also suggest that intention can significantly predict behaviour, indicating that intention can play a significant role in shaping behaviour. The findings support the TPB's premise that behavioural intention is the immediate antecedent of behaviour.