Perceptions of Malaysian tax professionals on voluntary disclosure programme participation

• Main Author: Balamurugan, Sinapayan
• Format: Thesis
• Language: English; English; English
• Published: 2018
• Subjects: HJ4771.6 Income Tax. Tax Returns.
• Online Access: https://etd.uum.edu.my/8811/1/S821423_01.pdf; https://etd.uum.edu.my/8811/2/S821423_02.pdf; https://etd.uum.edu.my/8811/3/s821423_references.docx; https://etd.uum.edu.my/8811/
• Institution: Universiti Utara Malaysia

While the tax administrators continuously implement more efficient enforcement activities to enhance tax compliance, voluntary disclosure programmes (VDP) or tax amnesties can also be a good tax policy to reduce the tax gap. There is ample evidence that this program can work wonders if executed carefully. In addition, taxpayer participation in this programme is also an essential aspect to ensure its successful implementation. In the Malaysian context, VDP was launched in year 2015 and 2016 as part of the budget recalibration process to boost revenue and improve compliance. The effectiveness of the program is yet to be unresolved but statistics shows that taxpayers’ responses were far below expectation. In spite of the poor responses to VDP and high reliance of taxpayers on tax professionals, this study attempts to explore tax professionals’ perceptions on reasons contributing to tax payers’ participation in Malaysian VDP. A survey approach is used to obtain information from tax practitioners (n=135) practicing in big four tax firms in Johor Bahru and Kuala Lumpur using purposive sampling method. The finding of this study reveals that all the reasons i.e. size of penalty reduction, fear of detection and punishment, risk of further audit and promotion efforts by IRBM are contributing to the VDP participation although the level of agreement is differs. Malaysian tax professionals perceives the size of penalty reduction as the strongest influential reason contributing to VDP participation while the risk of further audit was ranked as the second most important reason. Meanwhile, fear of detection and punishment and promotion efforts by IRBM were ranked as third and fourth reasons respectively. This study could be considered as the first attempt in understanding VDP implementation in Malaysia and the findings are expected to spark for future studies in this area.