Determinants of Sales Tax Compliance Behaviour in Malaysia: A Theory of Planned Behaviour Perspective on Sustainable Tax Administration

Abstract

Sales tax compliance continues to pose challenges within self-assessment systems, particularly where tax laws are complex. This study used the Theory of Planned Behaviour to examine how tax morale, perceived social media norms, and tax penalties influence sales tax compliance behaviour, with the intention to comply acting as a mediator. A survey of registered manufacturers produced 400 usable responses from 480 questionnaires distributed, representing an 83.3 per cent usable response rate. The data were analysed using Partial Least Squares Structural Equation Modelling. The findings show that tax morale positively influences both intention and compliance behaviour, with complementary partial mediation. Tax penalties significantly influence intention but have no significant direct effect on compliance behaviour, indicating indirect-only mediation. Perceived social media norms do not significantly influence intention but have a weak, significant direct effect on compliance behaviour, resulting in no mediation. The study extends the Theory of Planned Behaviour to organisational sales tax compliance and highlights behavioural interventions, taxpayer education, and proportionate enforcement as practical approaches to promoting voluntary compliance, fiscal sustainability, and sustainable tax administration.