24x7 Service; AnyTime; AnyWhere

Cooperative Tax Compliance Framework for Malaysian Tax Authority

Saad, Natrah and Ibrahim, Idawati and Mat Udin, Noraza (2021) Cooperative Tax Compliance Framework for Malaysian Tax Authority. Technical Report. UUM. (Submitted)

[thumbnail of 13804.pdf] PDF - Submitted Version
Restricted to Registered users only

Download (1MB)


The existence of the cooperative compliance concept is a sign of evolvement in tax compliance where compliance towards tax law is settled on the basis of cooperation between the tax authorities and taxpayers to ensure the timely payment of the right amount of tax. Cooperative tax compliance which is built on trust and transparency as well as predictability and certainty requires tax authority and taxpayers to collaborate in achieving optimal compliance. This open relationship approach allows taxpayers to receive advance certainty and have reduced compliance costs while the tax authority benefits from more efficient use of limited resources. Following the recommendation by the Organisation for Economic Co-operation and Development (OECD), 24 countries namely Australia, Austria, Canada, Denmark, Finland, France, Germany, Hong Kong, Hungary, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Russia, Singapore, Slovenia, South Africa, Spain, Sweden, UK, and USA) have implemented this enhanced relationship. Notwithstanding the success stories of its implementation in developed countries, this scheme is yet to be formally adopted in Malaysia. In line with that, the perceptions of 48 tax professionals and four tax administrators were sought through survey and interview in order to understand their views on the feasibility of cooperative tax compliance in Malaysia. The survey respondents were systematically selected among 2,800 tax professionals who registered with the Inland Revenue Board Malaysia (IRBM). As for interview, the participants were invited based on their experience dealing with cooperative tax compliance. Generally, they consistently believe that cooperative tax compliance is feasible but subject to certain conditions. These include simplicity of tax laws, mind-set change of tax administrators, tax education, transparency, mutual trust, and adequacy of tax personnel. Based on the aforementioned findings together with a review on cooperative tax compliance adopted in other developed countries, this study proposes a framework of cooperative tax compliance for the Malaysian environment. It is hoped that this framework will strengthen the current compliance strategies by offering a quality compliance approach.

Item Type: Monograph (Technical Report)
Additional Information: S/O 13804
Uncontrolled Keywords: cooperative compliance, framework, Organization for Economic Co-operation and Development, trust, transparency, tax authority
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Research and Innovation Management Centre (RIMC)
Depositing User: Mrs Nurin Jazlina Hamid
Date Deposited: 30 Jul 2023 10:28
Last Modified: 30 Jul 2023 10:28

Actions (login required)

View Item View Item