Exploring Items for Measuring the Sales and Service Tax (SST) Compliance Constructs using Exploratory Factor Analysis (EFA) Procedure
Lee Heng Liang, Mohd Noor Azli Ali Khan · International Journal of Academic Research in Business and Social Sciences · 2024
Tax compliance is a crucial factor affecting the revenue in any government. Revenues are collected for financing the goods and services provided to their citizens and businesses. Constructs such as tax audit, tax penalty, complexity of laws, tax fairness, and peer influence, are important components that may influence tax compliance behaviour. The aim of this study is to conduct verification of tool via exploratory factor analysis (EFA). This questionnaire was modified from previous studies which consists of 32 items and distributed online to the Sales Tax and Service Tax (SST) registered persons. 120 responses were collected for EFA in which each construct was done individually. The findings revealed that all the constructs had one dimension or component. Each item in the construct had a factor loading of > 0.5 while Bartlett’s Test of Sphericity was < 0.05. The Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy was more than 0.6 for all constructs, which meant the sample size was sufficient and appropriate. All items were reliable as Cronbach’s Alpha result was above 0.7. This study discovered a definitive tool to evaluate the effectiveness of economics and non-economics constructs towards SST compliance.