Administrative related factors affecting the assessment tax arrears

Abstract

Local government (LG) is an agency that has been empowered through legal provisions to impose the assessment tax. Thus, it directly causes the affairs of tax administration to be parked under the scope and jurisdiction of the LGs. Assessment tax arrear is a long-standing issue that has been faced by the LGs. From time to time, the crisis of assessment tax arrears is considered as getting worse and it requires various proactive actions to be taken including re-evaluating the current administrative process of assessment tax as it is practicising by the LGs. The main purpose of this study is to identify the factors which related to tax administration that has influenced the existence of assessment tax arrears based on the perspective of taxpayers. This study also aims to assess the strength of the relationship between each of the factors involved. The required data were collected through a survey method and a set of related questionnaire form was used as a research instrument. The respondents of this study are consisting of property owners who are subject to pay the assessment tax. In overall, this study has involved 261 respondents. The data collected were analyzed using descriptive and correlation methods. The findings of the study show that there are 8 administrative related factors that have influenced the existence of assessment tax arrears, namely taxation equality and justice, tax beliefs, tax expertise, staff adequacy, payment facility, transparency of services, tax incentives and tax communication. Through this study as well, it was found all the factors have a significant relationship with most of other factors.