Demographic factors and awareness on the self-assessment system of taxation: a study on salaried individual taxpayer in the manufacturing industry / Tuan Zainun Tuan Mat

This study examines the level of awareness on self-assessment system of taxation among salaried individual taxpayers in manufacturing sectors. A survey was conducted by distributing questionnaires to salaried taxpayers in manufacturing companies selected in the Klang Valley. The objectives of this study are to identify the demographic characteristics of salaried individual taxpayers, establish the level of awareness on self-assessment system and explore the potential relationship between the levels of awareness in relation to the demographic characteristics of taxpayers. The results showed that salaried taxpayers have good knowledge and understanding on the common tax treatment (rebates and reliefs). They also acquired good knowledge on the types of taxable income and their rights. However, on the level of understanding and knowledge on the uncommon tax treatment (e.g. rebates on levy and tax credit on dividend) and type of taxable income (e.g. pension and annuities) shows an unfavourable result. The results from this study indicates that some respondents are unaware of the selfassessment system would take place for salaried individual by the year 2004. This could be due to the limited exposure by the Inland Revenue Board (IRB) on the new system or lack of initiatives taken by taxpayers in getting the information. The 'wait until last minute' attitude could be one of the reasons why the taxpayers are still unaware of the new system. Therefore, the study suggests that both IRB and taxpayers should bilaterally play an active role to ensure the success of the new system.