Individual and organisational factors affecting GST compliance among Malaysian SMEs

Abstract

Hiring SMEs to be employed as GST collecting agent and documenter may affect their major economic contribution to the world due to its limitations in terms of informal routine, lack of financing, low productivity resources and less information. GST documentation increases the administration time for the SMEs even though no requirement to pay tax. Still, SMEs prefer to be registered even though voluntarily as registration enables them to obtain tax credits, avoid to lose clients and able to issue tax invoice. Hence, various issues have been raised to solve the administration burdens, refunds and reporting errors which at last can injure the cash flows of SME businesses. 120 responses on the questionnaire from Malaysia GST-registered SMEs are generated from this study via purposive sampling and snowball method. Our study on the individual and organisational factors towards GST compliance by SMEs revealed the negative relationship between GST complexity and GST compliance. Hence, higher GST complexity will lower GST compliance.