Routine Activity Theory, Tax Knowledge, and Tax Compliance: An Empirical Evidence from Malaysian High-Income University Staff
DOI:
https://doi.org/10.37134/ibej.Vol18.1.3.2025Keywords:
Tax Knowledge, Tax Compliance, Individual Taxpayers, Tax Learning, Malaysia, Routine Activity TheoryAbstract
This study examines the relationship between tax knowledge and tax compliance among Malaysian high-income earning university staff, using Routine Activity Theory as the theoretical framework. The study utilized a sample size of 500 high-income university staff members and employed Pearson correlation for statistical analysis. Out of the 419 received responses, 172 valid responses were used from the high-income group. The survey collected demographic information, tax knowledge, and tax compliance data using dummy variables and Likert scales. The findings demonstrate a significant negative correlation (-0.751, p < 0.05) between tax knowledge and tax compliance. This suggests that individuals with higher tax knowledge may exploit loopholes and engage in non-compliance. These findings challenge the conventional belief that increased tax knowledge promotes compliance. The study emphasizes the importance of integrating tax education with information on penalties for non-compliance to address this issue. The findings suggest significant implications for tax policy reform and educational programs aimed at improving tax compliance. Practical implications include the development of targeted tax education programs and stricter enforcement strategies. Additionally, the study highlights the relevance of Routine Activity Theory in understanding taxpayer behavior, as higher tax knowledge could potentially identify "suitable targets" for non-compliance. Future research should consider objective measures of tax compliance and explore potential serial mediation effects. This study contributes to the existing literature by providing insights into the complex dynamics between tax knowledge and compliance among high-income university staff in Malaysia.
References
Assegaf, A. A. R., & Andesto, R. (2023). The effect of tax socialization, tax knowledge and taxpayer awareness with tax sanctions as a moderation variable on individual taxpayer compliance (Empirical study on taxpayers registered at KPP Pratama Cibinong West Java). Jurnal Multidisiplin Madani, 3(5), 1105–1124.
Abu Hassan, N. S., Palil, M. R., Ramli, R., & Maelah, R. (2022). Enhancing tax compliance in Malaysia: Does tax learning and education matter? International Business Education Journal, 15(1), 18–29. https://doi.org/10.37134/ibej.vol15.1.2.2022
Amin, S., Buhari, P., Yaacob, A., & Iddy, Z. (2022). Exploring the influence of tax knowledge in increasing tax compliance by introducing tax education at tertiary level institutions. Open Journal of Accounting, 11(1), 57–70.
Azaka, L., & Balogun, S. K. (2022). Tax attitude and perception of fairness as predictors of tax compliance among SME business owners: The mediating role of tax knowledge. Public Economics, 25(3), 139–149.
Devos, K. (2013). The impact of tax professionals upon the compliance behavior of Australian individual taxpayers. Revenue Law Journal, 22(1), 1–28.
Fauziati, P., Minovia, A. F., Muslim, R. Y., & Nasrah, R. (2020). The impact of tax knowledge on tax compliance: Case study in Kota Padang, Indonesia. Journal of Advanced Research in Business and Management Studies, 2(1), 22–30.
Free Malaysia Today. (2022, June 14). 31,000 possible tax evaders identified, says LHDN. Free Malaysia Today. https://www.freemalaysiatoday.com/category/nation/2022/06/14/31000-possible-tax-evaders-identified-says-lhdn/
Hauptman, L., Žmuk, B., & Pavić, I. (2024). Tax compliance in Slovenia: An empirical assessment of tax knowledge and fairness perception. Journal of Risk and Financial Management, 17(3), 89.
Hayat, N., Salameh, A. A., Al Mamun, A., Ali, M. H., & Makhbul, Z. K. M. (2022). SAGE Open, 12(3), 1-20.
Jannah, M., Rachmawati, L., & Ningsih, W. F. (2024). The effect of knowledge, taxpayer awareness, and tax sanctions on taxpayer compliance. TGO Journal of Education, Science and Technology, 2(1), 28–46.
Khozen, I., & Setyowati, M. S. (2023). Managing taxpayer compliance: Reflections on the drivers of willingness to pay taxes in times of crisis. Cogent Business & Management, 10(2).
Latif, F., Jabeen, M., & Jabeen, M. (2023). The impact of tax knowledge, tax system complexity and tax fairness perception on compliance behavior of a taxpayer in KPK. International Journal of Business and Management Sciences, 4(4), 19–40.
Lestianingrum, E., & Asmapane, S. (2023). The effect of tax knowledge, taxpayer awareness, and the application of e-filing on individual taxpayer compliance. Jurnal Ekonomi dan Manajemen, 20(4), 482–492.
Lutfi, A., Alshira’h, A. F., Alshirah, M. H., Al-Ababneh, H. A., Alrawad, M., Almaiah, M. A., Abu Dalbouh, F., Magablih, A. M., Mohammed, F. M., & Alardi, M. W. (2023). Enhancing VAT compliance in the retail industry: The role of socio-economic determinants and tax knowledge moderation. Journal of Open Innovation: Technology, Market, and Complexity, 9(3), 100–121.
Mascagni, G., Santoro, F., & Mukama, D. (2024). Teach to comply? Evidence from a taxpayer education program in Rwanda. International Tax and Public Finance, 35(1), https://doi.org/10.
Ministry of Finance Malaysia. (2019). Budget 2019. Retrieved from https://www1.treasury.gov.my/pdf/budget/speech/bs19.pdf
Mohdali, R., Benk, S., Budak, T., MohdIsa, K., & Yussof, S.H. (2017). A cross-cultural study of religiosity and tax compliance attitudes in Malaysia and Turkey. E Journal of Tax Research. 15(3), 490–505.
Mustapha, B., Olaleye, B. R., Olanike, O. O., & Olowookere, J. K. (2021). Need Analysis of Tax Education for Non-Accounting Program: Evidence from Nigerian Universities. International Business Education Journal, 14(2), 61–71. https://doi.org/10.37134/ibej.vol14.2.6.2021
Naape, B. (2023). Tax knowledge, tax complexity and tax compliance in South Africa. Finance, Accounting and Business Analysis, 5(1), 14–27.
Nuryati, T. (2022). The effect of taxpayer knowledge, tax socialization and tax sanctions on the voluntary disclosure program. Journal of Sustainable Community Development, 4(2), 1-16.
Oladipo, O. A., Nwanji, T. I., Eluyela, F. D., Godo, B., & Adegboyegun, A. E. (2022). Impact of tax fairness and tax knowledge on tax compliance behavior of listed manufacturing companies in Nigeria. Problems and Perspectives in Management, 20(1), 41–48.
PricewaterhouseCoopers. (2022). Tax compliance. Retrieved from https://www.pwc.com/mn/en/services/tax_compliance.html
Sritharan, N., Sahari, S., Cheuk Choy Sheung Sharon, & Mohamed Ahmad Syubaili. (2022). Examining the Moderating Effect of Financial Constraint on Tax Compliance: A Sequential Explanatory Design Study on Malaysian Tax Professionals. International Business Education Journal, 15(2), 29–48. https://doi.org/10.37134/ibej.Vol15.2.3.2022
Susanti, E., icut, C. F. S., & budi, B. S. anam. (2023). The Effect of Tax Amnesty, Tax Knowledge and Online Tax Services on Personal Taxpayer Complience In Aceh Besar District. J-Iscan: Journal of Islamic Accounting Research, 5(1), 44–55
Trawule, A. Y., Gadzo, S. G., Kportorgbi, H. K., & Sam-Quarm, R. (2022). Tax education and fear-appealing messages: A grease or sand in the wheels of tax compliance? Accounting, Corporate Governance & Business Ethics, 5(6). http://dx.doi.org/10.1080/23311975.2022.2049436
The Edge Markets. (2022). IRB traces more than 31,000 tax evaders, tax loss estimated at RM665 mil. [Online] Available at: https://www.theedgemarkets.com/article/irb-traces-more-31000-tax-evaders-tax-loss-estimated-rm665-mil
Wardani, P. S. (2023). The influence of changes in personal income tax rate towards tax compliance by intention to comply and tax knowledge as mediating variable. Jurnal Akuntansi, 7(2), 1-6. http://dx.doi.org/10.2991/aebmr.k.200309.040
World Bank. (2018). Malaysia: Tax revenue. World Tax Database. [Online] Available at: https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?end=2018&locations=MY&start=1996&view=chart
World Bank. (2020). Gross National Income, Malaysia. Current International Income Database. [Online] Available at: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=MY
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Nivakan Sritharan, Nurul Ilma binti Salleh , Jacqueline Chang Siak Gek
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
