TAX-COMPLIANCE COMPLEXITY AND CAPABILITY AMONG MALAYSIAN SME OWNER-OPERATORS: AN EXPLORATORY MIXED-METHODS STUDY IN NILAI, NEGERI SEMBILAN

Izlawanie Muhammad; Nor Asiah Taib

doi:10.33102/tywfmx87

Authors

Izlawanie Muhammad Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia Author
Nor Asiah Taib Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia Author

DOI:

https://doi.org/10.33102/tywfmx87

Keywords:

tax complexity, taxpayer compliance, small and medium enterprises, mixed methods, digital filing

Abstract

Tax compliance for small and medium enterprises (SMEs) involves more than difficulty in understanding tax rules. It also depends on tax knowledge, the need to respond to changes in tax law, access to tax-authority support, and the usability of digital filing systems. This exploratory study examines these areas among 19 SME business owners in Nilai, Negeri Sembilan. A convergent parallel mixed-methods design was used. Quantitative data were collected through a 22-item Likert instrument and analysed descriptively across five domains: Perceived Tax Complexity, Tax Knowledge and Learning Orientation, Frequency of Tax Law Changes, Tax Authority Support and Accessibility, and Digital Filing Usability and Trust. Qualitative data from open-ended interviews were analysed using reflexive thematic analysis. The findings were integrated through a joint display. The highest item mean concerned trust in the security and accuracy of the Inland Revenue Board of Malaysia (IRBM) online platform. The Frequency of Tax Law Changes domain reflected frequent adjustment requirements, alongside moderate perceptions of challenge and opportunity and moderate adaptation. Qualitative findings added practical detail on record-keeping, tax knowledge, service consistency, and digital access. Positive self-assessed knowledge at the sample level coexisted with direct statements of knowledge difficulty from several respondents. The study provides an exploratory framework for examining connected tax-compliance issues and identifies five areas for policy testing.

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