The Influence of Culture on Tax Non-compliance Intention among SME Owners in Malaysia

Abstract

The importance of SMEs as the backbone of Malaysia in generating national income is undoubted. However, little consideration was given to culture as one of the determinants of tax non-compliance. With a multicultural society that has different cultures, beliefs and values, it is important to examine the influence of culture on tax non-compliance. Therefore, this study attempts to examine the influence of culture on tax non-compliance intention. The survey collected data of 105 usable SME owners from central region of Peninsular Malaysia. Findings reveal that power distance, individualism, masculinity and uncertainty avoidance are significantly related with tax non-compliance intention, whereas long-term orientation is insignificant. Suggestions for policymakers and future researchers are also highlighted.