The main objective of this study is to estimate compliance costs for personal income tax (PIT) system in Malaysia and to investigate the effect of e-filing on compliance costs of PIT system in Malaysia. It is found that, on average, e-filing consumed about 10 hours while manual filing took about 13 hours. However, statistically, the difference is not significant. The findings suggest that e-filing is only a tool to facilitate the filing process. It is not meant to reduce the whole burden of annual filing for personal income taxpayers.
Keywords: Compliance costs; e-filing; manual filing; personal income tax; Malaysia.
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