Tax Compliance Behaviour among Malaysian Professionals: An Extension of Mars Model of Individual Behaviour and Performance

The issue of tax compliance is old as the taxes itself. It is one of the major problems
for all taxation authorities across the globe. In Malaysia, tax revenue accounted up to
51% of Malaysian government budget but tax gap was reported to have causedrevenue
loss up to 47 billion since 2015. From this amount, it has been identified that the
professionals like doctors, lawyers, architects and engineers are owing huge amount of
tax and penalties to the IRB. Due to this, examining the factors that influence this group
to comply with the tax law is therefore worthwhile. The focus of this study is to
investigate the factors contribute to tax compliance among the professional group using
the MARS Model of Individual Behaviour and Performance, an organizational
behaviour model. In addition to that, two variables were added to the model which are,
religiosity and ethical sensitivity. The population of this study is the individual
taxpayers who works as doctors, engineers, lawyers, architect, quantity surveyor,
accountant and pharmacist. Simple random sampling and snowball sampling were used
in this study. A total of 123 complete and usable responses were collected using survey
questionnaire. The data was analyzed using Statistical Package for Social Sciences
(SPSS) and Smart Partial Least Square (PLS). The findings showed that role perception
and ethical sensitivity have positive effect ontax compliance behaviour while other
variables have no positive effect on tax compliance behaviour among the professionals.
In addition, situational factor strengthens the positive relationship of role perception on
tax compliance behaviour. Theoretical and practical implications of this study were also
discussed in understanding the tax compliance behaviour among professional group in
Malaysia. Tax authorities are suggested to come out with various programs on civic
duties and moral obligations to increase tax compliance behaviour on this group. The
findings of this study are limited to the professional group in Malaysia only. Future
studies are recommended to replicate the study by including high income group in
Malaysia as well as to investigate the compliance of professional group in developing
countries to better compare the findings with the findings of this study.