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Tax Compliance Behaviour in the Digital Economy: Evidence from Muslim Online Business Entrepreneurs in Malaysia

Year: 2025

Type: article

Abstract: The rapid growth of Malaysia's digital economy has significantly increased entrepreneurial activities through platforms such as Shopee, Lazada, and TikTok Shop.While these ventures contribute to national revenue, ensuring tax compliance remains a challenge, particularly among Muslim online business entrepreneurs.Guided by the Theory of Planned Behaviour (TPB), this study investigates the determinants of tax compliance behaviour with a focus on tax morale, tax knowledge, tax complexity, and subjective norms.Using a survey-based quantitative approach, data were collected from 165 active Muslim online entrepreneurs and analysed through descriptive statistics, reliability testing, and multiple regression.Findings reveal that tax morale and subjective norms significantly influence compliance, underscoring the importance of ethical considerations and social influences in shaping tax behaviour.Conversely, tax knowledge and tax complexity did not show a significant effect, suggesting that awareness and perceived difficulty of tax systems are less critical than values and social expectations.The results highlight that voluntary compliance among online entrepreneurs is more strongly linked to moral responsibility and societal pressure than technical knowledge or complexity of procedures.This study contributes to the behavioural tax literature by contextualising compliance in the digital economy and offers practical implications for policymakers.Interventions focusing on strengthening ethical awareness, leveraging social norms, and enhancing trust in tax authorities are recommended to improve compliance levels.Overall, the findings provide insights for designing more effective tax policies that align with the unique characteristics of digital entrepreneurs in Malaysia.

Source: International Journal of Academic Research in Business and Social Sciences

DOI: 10.6007/ijarbss/v15-i9/26347

Authors: Nik Norhasmah Nik Soh, Yusri Huzaimi Mat Jusoh, Mohd Miqdad Aswad Ahmad, Azim Izzudin Mohamad, Ruslaina Yusoff, Wan Mohd Firdaus Wan Mohamed

Institutions: Universiti Teknologi MARA System, Universiti Teknologi MARA

Language: English

Topic: Taxation and Compliance Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W4414097245