The influence of religiosity on taxpayers’ compliance attitudes: Empirical evidence from a mixed-methods study in Malaysia

This paper aims to explore the role of religiosity in determining taxpayers’ attitudes towards tax compliance and discusses likely explanations for the findings in the context of the literature.

A sequential exploratory mixed-methods research design was used in this study. Data were collected using a self-administered survey which involved approximately 300 individual taxpayers in Malaysia, followed by face-to-face interviews with 14 individual taxpayers. Majority of the respondents in both survey and interviews were salaried taxpayers, and the remaining were self-employed taxpayers.

Religiosity is found to have a minimal but statistically significant positive impact on voluntary tax compliance. This probably can be explained by the strong religious values held by many Malaysians, as well as the concept of giving which has been emphasised in almost all religions.

Because this study did not differentiate between religious values and moral values in measuring the source of respondents’ internal values, there was a possibility that their internal values may be derived from both sources. Hence, comparing the impact of individuals’ religious values with individuals’ moral values that have no influence from religion on tax compliance is suggested for future research.

A new mechanism is suggested to the Malaysian tax authority in regards to the treatment of religious payment to reduce the sense of inequality among citizens and taxpayers.

This study enriches the limited literature of tax compliance from the perspective of developing countries, particularly Malaysia, and adds to the limited literature internationally from a religiosity perspective.