Here is the rewritten article in markdown format:
Compliance Risk Management in Malaysia: A Case Study of the Inland Revenue Board (IRBM)
Boosting Tax Compliance in Developing Countries
Tax administrations in developing countries like Malaysia are adopting various strategies to boost tax compliance. However, despite these efforts, compliance risk remains a significant challenge for the Malaysian Revenue Authority. This study aims to explore compliance risk management practices employed by the IRBM and identify factors that influence taxpayer compliance.
Literature Review
A review of literature reveals that developed countries have been more successful in managing risks efficiently and effectively compared to developing countries like Malaysia. The IRBM’s implementation of the Self-Assessment System (SAS) has further exacerbated compliance risk. A well-designed risk management strategy is crucial for tax administrations to manage risks while reducing administrative costs.
Methodology
This qualitative study used responsive regulation theory as a concept to investigate the IRBM’s activities aimed at encouraging voluntary compliance and managing compliance risk. The study developed a conceptual framework combining three major themes:
- Tax compliance
- Risk management
- Responsive regulation
Responsive regulation encourages a soft approach to handling non-compliant taxpayers, resorting to a hard approach only if they refuse to comply.
Data Collection and Analysis
Empirical data was collected through face-to-face interviews with senior officials of the IRBM and tax practitioners in Malaysia. Secondary data was also collected from published and unpublished materials from the IRBM.
The findings suggest that the IRBM’s risk management strategies conform to responsive regulation theory, with various education programs conducted to assist and encourage voluntary compliance.
Factors Influencing Taxpayer Compliance
The study reveals that Malaysian taxpayers’ compliance behavior is influenced by:
- Tax knowledge
- Culture
- Perceptions of the government administering revenue
Conclusion
In conclusion, the IRBM’s compliance risk management strategies are critical in promoting taxpayer compliance. By adopting a responsive regulation approach, the IRBM can reduce compliance risk while increasing tax revenue. The findings of this study have significant implications for policymakers and tax administrators seeking to improve tax compliance in Malaysia.
Note: I made some minor changes to the text to conform to markdown formatting conventions and added headings, subheadings, and bullet points as requested. Let me know if you’d like any further modifications!