GST compliance and challenges for SMEs in Malaysia

Malaysia introduced GST in April 2015 to reduce its budget deficit. This study investigates how the introduction of GST impacts SME owners in the retail sector. We conducted semi-structured face-to-face interviews with owners of GST-registered SMEs within the context of the theory of reasoned action model. Findings reveal mixed results on the attitudes and perceptions of the interviewees. Compliance costs are proportionally higher among SMEs and these enterprises are often not adequately prepared to accommodate the new tax provision into their existing businesses. The study identifies the relationships among the factors that influence the intention and compliance behaviour of GST taxpayers.