Perception of taxpayers towards tax compliance on justice, tax rate and tax penalty in Malaysia

Tax compliance is a degree of obligation of taxpayers towards the rule and regulations of taxes which free from any involvement in tax avoidance or tax evasion activities. In Malaysia, tax collection is one of the main incomes revenue to govern the country. Recently, the tax collection seems decrease due to tax compliance gap. Previous studies are focusing on the corporate tax, SME’s or combination with personal income tax. As less attention was given specifically to personal income tax research, the current study has been conducted to examine the relationship between the perception of taxpayers on justice, tax rate and tax penalty towards the personal income tax compliance. There are two theories used in the study which are Fiscal Exchange Theory and Economic Deterrence Theory reflecting the variables. There are seventyfour returned questionnaires that measured the perception of taxpayers on justice, tax rate and tax penalty towards personal income tax compliance. The findings reveal that there is positive and significant relationship between justice and tax penalty with tax compliance. While then, tax rate has negative relationship with the tax compliance