Behavioural determinants of sales tax compliance among E&E manufacturing in Malaysia
Keywords:
Sales tax compliance behaviour, Theory of Planned Behaviour, Tax morale, Electrical and electronics manufacturing SMEs, Intention to complyAbstract
Sales tax compliance remains a significant challenge within Malaysia’s manufacturing sector, particularly among Electrical and Electronics (E&E) manufacturing SMEs operating under the Self-Assessment System (SAS). This study examines the behavioural determinants influencing sales tax compliance behaviour using the Theory of Planned Behaviour (TPB) framework. Specifically, the study investigates the influence of tax morale, perceived social media norms, and tax penalties on sales tax compliance behaviour, with intention to comply acting as a mediating variable. Data were collected through a structured questionnaire survey administered to registered E&E manufacturing SMEs across Malaysia. A total of 104 usable responses were analysed using Partial Least Squares Structural Equation Modelling via WarpPLS 7.0. The findings indicate that tax morale and tax penalties significantly influence intention to comply, while perceived social media norms significantly influence sales tax compliance behaviour directly. In addition, intention to comply significantly mediates the relationships between tax morale, tax penalties, and compliance behaviour. The study confirms the applicability of the TPB in explaining sales tax compliance behaviour within Self-Assessment System (SAS) tax environments and contributes industry-specific evidence from Malaysia’s E&E manufacturing sector. The findings also provide practical implications for policymakers in strengthening behavioural and compliance strategies within manufacturing industries.
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