Examining public acceptance choice causes on sales and service tax implementation in Malaysia

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In Malaysia, the indirect tax environment is evolving fast, and the risk has never been higher. The public perception of Sales and Service Tax (SST) as a business cost aggravates the increase in essential needs prices. Hence, the heavy burden on Malaysians’ income, which ultimately constitutes a big worry and outcry, makes the study relevant.
The study investigates the relationship between selected causes of equity and fairness (tax fairness), certainty (tax burden), accountability to taxpayers, tax knowledge, and public acceptance of SST implementation in Malaysia.
Data were collected through a structured survey among the public in Klang Valley. Respondents were chosen randomly from various locations in public and private sector organizations. A total of 177 out of the 228 completed and received questionnaires are found suitable for further analysis. The study adopts the SmartPLS version 3.3.2 statistical analysis tool to test the four hypotheses formulated.
The study results reveal tax fairness, tax burden, and government accountability are significant and positively relate to public acceptance of SST implementation in Malaysia. This further buttressed that tax fairness, tax burden, and government accountability are critical for public acceptance of SST implementation because of their economic implications. In contrast, tax knowledge is not significant and negatively relates to public acceptance of SST implementation. The effect indicates that tax knowledge is not an essential factor as far as public acceptance of SST implementation is concerned in Malaysia.

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    • Figure 1. Conceptual framework and hypotheses development of the study
    • Figure 2. Measurement model (PLS algorithm) testing for reliability and validity and R2 included.
    • Figure 3. Assessing F-squared (f2) effect size – tax fairness excluded
    • Figure 4a. Assessing Q-squared (Q2) effect size included
    • Figure 4b. Assessing Q-squared (Q2) effect size Тax fairness excluded (blindfolding technique)
    • Figure 5. Direct relationship hypotheses testing (bootstrapping technique)
    • Table 1. Respondents’ profile
    • Table 2. Key quality criteria of the reflective measurement model
    • Table 3. Indicator cross-loadings analysis
    • Table 4. Discriminant validity – Fornell-Larcker criterion
    • Table 5. Discriminant validity (HTMT ratio of correlations method criterion)
    • Table 6. Collinearity VIF values
    • Table 7. F-squared (f2) effect size
    • Table 8. Q-squared (Q2) effect size
    • Table 9. Direct relationship hypotheses testing
    • Conceptualization
      Nur Erma Suryani Mohd Jamel
    • Data curation
      Nur Erma Suryani Mohd Jamel
    • Investigation
      Nur Erma Suryani Mohd Jamel
    • Project administration
      Nur Erma Suryani Mohd Jamel
    • Methodology
      Nur Erma Suryani Mohd Jamel, Oluwatoyin Muse Johnson Popoola
    • Validation
      Nur Erma Suryani Mohd Jamel, Oluwatoyin Muse Johnson Popoola
    • Visualization
      Nur Erma Suryani Mohd Jamel
    • Writing – original draft
      Nur Erma Suryani Mohd Jamel, Oluwatoyin Muse Johnson Popoola
    • Writing – review & editing
      Nur Erma Suryani Mohd Jamel, Oluwatoyin Muse Johnson Popoola
    • Formal Analysis
      Oluwatoyin Muse Johnson Popoola
    • Resources
      Oluwatoyin Muse Johnson Popoola
    • Software
      Oluwatoyin Muse Johnson Popoola
    • Supervision
      Oluwatoyin Muse Johnson Popoola