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i M f X / P P Q I T T
T r V M H TO P I
\ / f A D AU t \ l V L l X i J l i 1 X E J I Y I Y V _ / J L . \ _ J Y J I l Y I / " \ I \ j r T t
A STUDY ON MANUFACTURERS' BEHAVIOR TOWARDS TAX EVASION OF SALES TAX IN INANAM, MENGGATAL AND KKIP IMPOSED BY ROYAL MALAYSIA CUSTOMS DEPARTMENTS
B Y
A ( U i l M ) Sat
VALENTINO MARK JAMES 2009672952
BACHELOR OF BUSINESS ADMINISTRATION (HONS) MARKETING
FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA (UiTM)
KOTA KINABALU CAMPUS, SABAH
3rd July 2013
ACKNOWLEDGEMENT
First and foremost I would love to thank God the opportunity to complete my study, i also would like to convey my deepest gratitude and sincere appreciation to my supervisor, Dr. Rozita@Uji Mohammed whom from the beginning has consented and provided me with all the guidance, assistance, motivation and advices through the processing and the completion of this thesis.
Special thanks to respective respondents and friends, who have been involved directly or indirectly, for their cooperation and precious time in allowing me to obtain the necessary feedbacks and information, suggestions and comments.
I would like also to extend my special thanks and utmost appreciation to my ex-Lecturers, classmates, workmates and individuals for their valuable supports and advices in preparing this project paper.
Last but not least, the greatest of all, to my beloved, caring and supportive wife, Shirley Marie Kenny for her love, understanding, patience, moral and spiritual support that never fade and undivided in all situations.
(i)
ABSTRACT
Tax is one of the ways to finance expenditures and it plays an important role in increasing the government revenue. The amount of tax collected depends on the structure of the economy. When the taxation is ineffective, many companies including manufacturers would use this opportunity to avoid paying tax and tax evasion would be popular.
Realizing the significant impact of tax evasion on the economy and a lack of study in this area for Sabah, this study attempts to fill the gap.
Specifically, this study tries to determine factors that cause the manufacturers in Inanam, Menggatal and KKIP areas fail to file their sales tax returns which lead to tax evasion. The results show that tax burden faced by the manufacturers, manufacturers' poor attitude (not bothered or not committed), manufacturers' lack of knowledge of sales tax penalty, inefficiency of enforcement and ineffectiveness of administrative system has positive effect tax evasion.
TABLE OF CONTENTS
PAGE
Acknowledgement i
Abstract ii List of Tables iii List of Figures iv CHAPTER 1
1.0 Background Of Study 1-2 1.1 Problem Statement 3 1.2 Scope of Study 4 1.3 Significant of Study 5 1.4 Objective of Study 6 1.5 Research Questions 6 1.6 Limitation of study 7
1.7 Framework 8 1.8 Key Terms 9 CHAPTER 2
2.0 Literature Review 10 2.1 Introduction 10 2.2 General Overview of RMCD 11-12
2.3 General Overview of Indirect Taxes in Malaysia 13-16 2.4 Views on Collection of Indirect Taxes Year 2011 17-19
2.5 General Overview of Sales Tax in Sabah 20 2.6 Amount of Sales Tax Not Paid In Sabah 21
2.7 Summary Overview of Sales Tax 22-24
2.8 Sales Tax Procedure 25-31 2.9 Overview of Tax Evasion 32-35 CHAPTER 3
3.0 Research Methodology and Design 36
3.1 Data Collection Technique 37-39 3.2 Operational Definition 39-40 3.3 Data Analysis Technique 40
CHAPTER 4
A n
4 . U Analysis ana interpretation 4 1 4 I
A 1 4 . 1 i n e K e s p o n a e n i s u e r n o g r a p n i c a n a r r o T i i e 4 9 4 Z 4 9 / A y e U l LIle r \ e o | J U I l U e l l l o A n o o f t h o R o c n n n H p n t c 4 3 - 4 4 A 3 4 . 0 H i i d l i f i n a t i n n o f t h o P o c n n n H o n t U u d 1II lUdLIUI 1 U l l l l e r x c b p u i l U e i l l
A A 4 . 4 CD A n n n n r l n n l ' t1 ft / I rx / I / M V I A W I D / " \ o i t i ^ n r \ e s p o n a e n i s i v i a n a g e r n e n i r O S I I I O N
4 7 4 8 4 / - 4 0 A R 4 . 0 L e f i g i l l U l O c l V l U e U l I N e r \ e o p U I I U e i U 4 £ / \ J \ J A fi
4. D T v / H Q O /"ftf M o n i 1 f o/ - x t - 1 1 r n r - 1 y p e o U l IVIdl l U l d O l U l e l .d 7
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ivianuTaciurers ivioniniy income
R 9 R 4 d P 4 . 0 A K V X ^ x i r\ T O o l o o 1 hv/ CPnirl hx/ IV#1 *^ n i i T * " X 1 i/*/*x r o
Amount OT oaies lax raia Dy tne ivianuTaciurers
RR RR A Q
4. y
( s-\ s-x 1 | f x rx/-"V / ^ X T CD 'ft X / l*VX /"X rft T ^ X T ^ P ' x I^ X f X 1 fx \Y
Frequency ot rayment OT oaies lax R7 RR
4 . 1 U fc-. f x f x | A 1 1 X f x w f x fr"4 rvx ^ x fr"k 4 4" f"v fr~ X. f x 1 f x fx I f X xy
opeciai uepartment TOT oaies lax RQ
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4 . I O
I n n n r a n c o o f t h o M o m ifooti i r o r c l y i l U l d l l U e U l Llle I V I d l l U l d U L U I e l o
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racinties ana oervice rroviaea uy K I V I V U
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4 . I O l l d l l l l l i y IVIdl 1UIdCLU 1 C I b 7 0 - 7 3
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O U I I I U I c l l l 111IUI11 IdLIUM O l v c l l D y r x l V I W 7 3 / o
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4 . 4 U tmcient K I V I U U umcers 7 3 7 4 1 O " / 4
4.21 Training Provided by RMCD 75-76 4.22 Availability of Information 76-77 4.23 Awareness of Obligation and Responsibility 7 R ( 0 4.24 Awareness of RMCD's Tax Audit 7 R 10 4.25 Objective of Tax Audit 7 n 4.26 Eight Most Common Approaches 80-81 /y 4.27 Transactions Constitute Tax Evasion 82-83 4.28 The Most Effective Method to Combat Tax Evasion 84-85 CHAPTER 5
5.0 Conclusion 86-87
5.1 Recommendation 88-89
B I B L I O G R A P H Y / R E F E R E N C E S 90-91 APPENDIX 1 (Statistically analysis of S P S S Programme v.13) 92-103
APPENDIX 2 (Set of Questionnaires) 5 Pages
