THE ACCEPTANCE OF THE ELECTRONIC TAX FILING SYSTEM BY MALAYSIAN TAXPAYERS

This paper discusses the factors that affect the acceptance of the e-filing system by Malaysian taxpayers. By understanding these factors, knowledge on taxpayers' decision making is enhanced and will improve the e-filing system in Malaysia. A new construct, perceived risk, was added into the Technology Acceptance Model (TAM). Based on the data collected from 166 respondents, the results showed that the proposed model explained up to 61% of the variance in behavioural intention. Results also indicate that perceived risk does influence perceived usefulness. Internet and its applications are gaining popularity in the public sector. Through electronic-government, information and delivery of services are made through the Internet medium to citizens. A form of e- government in Malaysia is the electronic tax-filing system introduced in 2006 by the Inland Revenue Board (IRB). Electronic tax-filing in Malaysia began for trial and experimental use in the year 2006 for salaried taxpayers and sole-proprietors. For partnerships and private limited companies, electronic tax- filing was only introduced in the year 2007. Despite the introduction of electronic tax-filing system, taxpayers are still allowed to declare their tax manually. Taxpayers, who file their income tax manually, have to fill out the tax assessment form sent by the IRB and perform the necessary calculations to obtain the amount of tax that they are required to pay to the IRB. The completed form has to be submitted either over the counter or by postal mail. Thus, when filing manually, taxpayers need to ensure that the forms are filled in correctly and all calculations were done correctly. For the IRB officers, the manual method of filing means that details of the tax assessment forms have to be entered into their computer system quickly and accurately. Under the e-filing system, taxpayers need to only enter the required information and the system will calculate the amount of tax assessed based on the information that was provided. The forms are then, sent electronically to the IRB. Through the electronic tax-filing system, the IRB is improving the efficiency of the tax assessment method, thus, resulting in an increase of tax collection and the reduction of computation errors. Furthermore electronic tax-filing system also benefits taxpayers because taxpayers do not need to go to the tax office to submit the forms, saves taxpayers' time, and most importantly taxpayers will be able to receive their tax refunds (if eligible) faster. Thus, with the evolution of Internet technology, electronic tax-filing is a convenient and faster system that benefits the IRB and taxpayers. Electronic tax-filing has the potential to benefit both taxpayers and IRB, but only if it is actually used by the Malaysian taxpayers. Identifying the factors that affect their decision to use the electronic tax- filing system are important considerations when trying to improve the electronic tax-filing system. Thus, the purpose of the study is to identify the factors that influence the perceptions that taxpayers have on the electronic tax-filing system and whether these perceptions influence their behavior to accept the e-filing system. To date, no study, known to the authors, has been conducted to study taxpayers' acceptance of the Malaysian electronic tax-filing system.