THE MEDIATING EFFECT OF TRUST IN AUTHORITY ON THE RELATIONSHIP BETWEEN TAX SYSTEM REFORM, TAX KNOWLEDGE, AND E-COMMERCE BUSINESS VOLUNTARY TAX COMPLIANCE

Abstract

This study aims to examine the mediating effect of trust in authority on the relationship between tax system reform, tax knowledge, and voluntary tax compliance among e-Commerce business taxpayers in Malaysia. This study posited tax system reform, tax knowledge, and trust in authority, as determinants of e-Commerce voluntary tax compliance. The study also proposed the mediating influent of trust in authority on the relationships between tax system reform, tax knowledge, and e-commerce-voluntary tax compliance. A self-administered questionnaire was distributed to 339 e-Commerce business taxpayers as respondents. The results revealed a significant and positive relationship between tax system reform, tax knowledge, and e-Commerce voluntary compliance. Additionally, tax system reform and tax knowledge have a significant direct relationship with e-commerce voluntary compliance, and have a significant relationship with mediating effect of trust in authority, indicating that there is a partial mediation effect between the relationships. The findings of this study showed how trust in authority can impact voluntary tax compliance among e-Commerce business taxpayers. This study would facilitate the stakeholders such as tax authorities, tax practitioners, and academicians to improve the understanding of the determinants that affect tax compliance of e-Commerce business taxpayers.