Outsourcing Malaysia Federal Tax Audit: The Stakeholders’ Views

Norsiah Ahmad, Zakiah Muhammadun Mohammed, Takiah Mohd Iskandar, Hajah Mustafa Mohd Hanefah, Sellywati Mohd Faizal

Abstract


ABSTRACT

This study investigates the feasibility of outsourcing tax audit work in Malaysian tax system to enhance administration efficiency, to curb tax evasion and abusive avoidance, and to improve revenue collection without introducing a new tax. The current tax audit, carried out by internal auditors of Inland Revenue Board of Malaysia, could only be performed on a small numbers of taxpayers due to high administrative cost in terms of audit cost and cost to employ and train more audit personnel. Nevertheless, without tax audit, tax non-compliance activity could not be curbed and government would be at high risk of losing its revenue. One of the possible ways to increase audit work is through strategic outsourcing. However, decision to outsource tax work should be critically examined because outsourcing of tax audit is a policy that could potentially affect every taxpayer. This paper discusses the views of the stakeholders (tax authorities, the taxpayers and tax agents) on the value of tax audit outsourcing. Using a mixed method approach, this study finds contradicting opinions on the idea of implementing external tax audit in Malaysia. While the tax authorities are hesitant to the idea, the companies as tax payers and the tax agents show favorable responds to the implementation of outsourced tax audit in Malaysia.

Keywords: Outsourcing; income tax; tax audit; tax compliance; Malaysia

ABSTRAK

Kajian ini mengkaji kesesuaian penggunaan penyumberan luar audit cukai dalam sistem percukaian di Malaysia untuk meningkatkan kecekapan pentadbiran, menyekat pengelakan dan pelarian cukai serta meningkat pendapatan tanpa perlu memperkenal cukai baru. Audit cukai semasa yang dijalankan oleh juruadit dalaman Lembaga Hasil Dalam Negeri Malaysia hanya boleh dilaksanakan ke atas sebilangan kecil pembayar cukai disebabkan kos pentadbiran yang tinggi merangkumi kos menjalankan audit dan kos menggaji dan melatih juruaudit baru. Walau bagaimanpun, tanpa audit cukai, aktiviti ketidakpatuhan cukai tidak akan dapat dibendung dan pihak kerajaan akan menanggung risiko kehilangan pendapatan yang tinggi. Salah satu cara untuk menambah bilangan audit adalah melalui penyumberan luar strategik. Namun, keputusan untuk memperkenalkan penyumberan luar audit cukai perlu diteliti kerana ia merupakan satu polisi yang boleh memberikan kesan kepada semua pembayar cukai. Artikel ini menggarap pandangan pemegang taruhan (pentadbir cukai, pembayar cukai dan agen cukai) terhadap nilai penyumberan luar audit cukai. Dengan menggunakan gabungan kaedah penyelidikan, kajian ini mendapati terdapat pendapat yang berbeza terhadap ide melaksanakan penyumberan luar audit cukai di Malaysia. Walaupun pentadbir cukai didapati kurang menyokong ide ini, syarikat sebagai pembayar cukai serta agen cukai didapati memberi respon yang positif terhadap pelaksanaan penyumberan luar audit cukai di Malaysia.

Kata kunci: Penyumberan luar; cukai pendapatan; audit cukai; pematuhan cukai; Malaysia


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