MEDIATING EFFECT OF THE E-COMMERCE ENTREPRENEUR VOLUNTARY TAX COMPLIANCE BEHAVIOUR: SPSS PROCESS MACRO

Abstract

The digital economy, including e-commerce, is expanding in modern life, making it possible for anybody to commence an online business and engage in tax evasion and non-compliance. However, IRBM consistently encourages taxpayers to voluntarily comply with tax laws, improves their access to tax services and provides improvements for tax declaration, tax computation, and tax payment. The purpose of this study is to look into the effects of the tax service and tax complexity on e-commerce entrepreneur voluntary tax compliance behaviour. Apart from that, this study also examines the mediating effect between these two determinants due to the legitimate power (of) and trust (in) the tax authority on e-commerce entrepreneur voluntary tax compliance behaviour. Approximately 146 Malaysian e-commerce entrepreneurs responded to the survey. The findings indicate that tax service affects e-commerce entrepreneur voluntary tax compliance behaviour but not tax complexity. However, analysis using a simple mediation model in SPSS Process Macro reveals that legitimate power and trust mediate tax complexity negatively but not tax service. The findings indicate that low tax complexity combined with legitimate power and trust increase voluntary tax compliance behaviour. E-commerce entrepreneurs are satisfied with the services provided, but as future improvements, IRBM must enrich their roles as tax service providers through improved trust such as efficient staff, good servicing, and supportive behaviour.