A Study of Taxpayers Perception of Adopting a

Personal Tax E-Filing System

Ng Lee Bee

Faculty of Business and Accountancy

University of Malaya

A Study of Taxpayers Perception of Adopting a

Personal Tax E-Filing System

Ng Lee Bee
Master of Management
University of Malaya

Submitted to the Graduate School of Business

Faculty of Business and Accountancy
University of Malaya, in partial fulfillment
of the requirements for the Degree of
Master of Management

July 2008

Abstract

The importance of understanding and influencing taxpayers acceptance of electronic taxfiling system is critical, given the investment in technology and the potential for cost
saving. Using the filing of personal tax as an example, this study explores and
understands Malaysian taxpayers perceptions towards electronic tax-filing system and
the impact on their behavioral intention to adopt. An extended version of the Technology
Acceptance Model (TAM) is used to examine the above perception with the new
construct perceived risk along with TAM two beliefs; perceived ease of use and
perceived usefulness.

A survey was distributed with 166 responses have generally agreed that risk construct is
also their concern while using electronic tax-filing. The results strongly support the
extended TAM in predicting the behavioral intention of taxpayers to adopt electronic
tax-filing system. The research model explains over half of the variance of the behavioral
intention to adopt electronic tax-filing system [R2 = 0.61], the unexplained 39 percent of
variance suggests that the model may have excluded other possible factors influencing
the adoption of electronic tax-filing system. Although this is a small scale study and not
comprehensive but it able to provide a preliminary study on taxpayers perception on
electronic tax-filing system. Therefore, the findings suggest that LHDNM should
consider these contextual factors in order to facilitate taxpayers adoption behavior.

ii

Finally, based on the findings of this survey, limitations for electronic tax-filing system
that could be addressed in future studies are discussed too.

iii

Acknowledgement

There are several important people I would like to convey my sincere thanks, for
making this research project a success.

First and foremost, I wish to express my sincere appreciation to my research project

supervisor, Dr Anna, for her patience guidance, constructive comments and assistance
throughout the preparation of this research project. Her tolerance towards my
ignorance and her unflinching desire to help me to complete my research meant a lot
to me. Her invaluable experience has enriched my understanding in conducting an
academic research. Gratitude is also due to Professor Mosaud Abessi who has guided
me in using AMOS for windows for estimating the model.

I also wish to express my deepest appreciation to my family in particular my parents

and siblings for their support and care concern throughout the MM programme.

Last but not least, I also wish to extend my special appreciation to my dear coursemate Krishna Naidu, Melissa Moey, Brandon Wong and Laura Lee who have
supported by providing me moral and spiritual support even they themselves are
engaged in their own study.

iv

TABLE OF CONTENTS

ABSTRACT.. ii
ACKNOWLEDGMENT............... iv
LIST OF TABLES................. v
LIST OF FIGURES............... vi

CHAPTERS
1

Page

INTRODUCTION.1
1.0

Introduction..1

1.1

Problem Statement...3

1.2

Purpose of the Study4

1.3

Research Model and Hypotheses.6

1.3.1

Perceived Ease of Use...7

1.3.2

Perceived Usefulness9

1.3.3

Perceived Risk..9

1.4

Scope of Study11

1.5

Limitation of Study.12

1.6

Organization of the Study...13

LITERATURE REVIEW.15
2.1

Technology Acceptance Model (TAM)..15

2.2

Perceived Risk.19

2.3

Perceived Risk and TAM relationship.22

2.4

Summary of Literature Review25

RESEARCH METHODOLOGY..27
3.1

Selection of Measures..27

3.2

Sampling of Designs29

3.3

Data Collection Procedures..29

3.4

Data Analysis Techniques29

RESEARCH FINDINGS...31
4.1

Characteristics of the Respondents..31

4.2

Reliability of Scale and Descriptive Statistics.34

4.3

Construct Validity35

4.4

Evaluating the Hypothesized Model38

4.5

Summary of Results.40

CONCLUSION AND RECOMMENDATION42

5.1

Discussion...42
5.1.1

Prediction of behavioral intention to adopt electronic

tax-filing system...........................................................43

5.1.2

Prediction of perceived ease of use on perceived

usefulness..45

5.1.3

Prediction of perceived ease of use on perceived

risk46

5.1.4

Prediction of perceived risk on perceived

usefulness.48

5.1.5

Conclusion49

5.2

Suggestions for Future Research.49

5.3

Implications.52

APPENDIX I.56
BIBLIOGRAPHY..60

LIST OF TABLES

TABLES..Page

Table 4.1: Respondents by Method of Filing.32

Table 4.2: Respondents Characteristics..32
Table 4.3: Descriptive statistics and scale reliability..34
Table 4.4: Results of the model goodness-of-fit.35
Table 4.5: Covariance Results.40

LIST OF FIGURES

FIGURES..Page

Figure 1.1: The Research Model.7

Figure 2.1: Daviss Technology Acceptance Model.16
Figure 4.1: Results of the Study Framework.38

vi

1. INTRODUCTION

1.0

Introduction

Currently there are two methods of tax-filing systems in Malaysia, manual filing and
electronic filing. Following are brief description of these two methods of tax-filing
system in Malaysia.

Manual filing is the traditional and still the most popular method of filing individual
tax returns in Malaysia. Taxpayers have to perform complex calculations and fill out
the standard printed form sent by LHDNM either by hand or typewriter. If taxpayers
did not receive the printed form from LHDNM, the standard form can be printed from
the website. The completed form can be submitted over the counter or by postal mail
without attaching any related documentation such as Form EA, tax-exempted receipt,
etc. When using the manual method of filing, taxpayers need to understand the
individual tax table and to ensure there are no errors through writing and/or
calculations. This manual method of filing is tedious work for the tax collection
department because they have to enter the taxpayers data into their computer system
quickly and accurately.

Internet and its applications are gaining popularity in business organization and public
institutions. This drives the Government to provide information and deliver service to
citizens and business partners through Internet medium. This is called e-government
and a type of pure-play service offered in e-government. Therefore, in 2006, the
Lembaga Hasil Dalam Negeri Malaysia (LHDNM) launched the electronic tax-filing
1

system. Electronic tax-filing system is one of the digital services offered by the
Malaysian Government and is an important function of e-government since it is
highly related to the life of citizens.

Electronic tax-filing begins for trial and experimental use in year 2006 and is coming
into its third-year of implementation. This is a method whereby taxpayers can file
their income tax return via the Internet. This system is for individual taxpayers with
employment income or sole proprietor. This is to facilitate taxpayers to fill up their
income tax forms electronically via the Internet following the implementation of the
self-assessment system. Taxpayers can use the system to file their year 2005 return.
However, those people who are running their businesses on a bigger scale such as
partnerships and private limited companies, they still declare and submit their income
tax by filing the BE forms manually. The electronic tax-filing for BE forms for these
group of taxpayers was only introduced in year 2007. Despite the implementation of
electronic tax-filing system, taxpayers are still allowed to declare their tax in either
the paper form or e-form. In other words, electronic tax-filing is still voluntary.

Taxpayers can e-file their returns by logging on to https://e.hasil.org.my/. The first

thing taxpayers need is a Digital Certificate from Lembaga Hasil Dalam Negeri
Malaysia (LHDNM). The DigiCert is necessary for logging into the electronic taxfiling system, gaining access to the B/BE forms, signing the said forms, and
submitting them to LHDNM. For those who have not registered for DigiCert, they
will receive a physical copy of Borang B/BE form. On the inside of the cover page,
there is a 16 digit PIN for electronic filing and is printed in a box at the top of the
page after taxpayers name, tax number and date. The DigiCert is only valid for three
2

years. Once taxpayer have registered and installed the DigiCert, they will be able to
gain access to the electronic forms and submit their tax returns via the system.

Electronic tax-filing is important to the Government because the system improves the
efficiency of evaluating and collecting tax information, increase tax collection and
reduce the error in computations. Furthermore electronic tax-filing has also benefited
taxpayers in many ways. It avoids the hassle of going to the tax office to submit the
forms, saves time to do the calculation, and most importantly electronic tax-filing
system will speed up tax refunds. Thus, with the evolution of Internet technology,
electronic tax-filing is a convenient and faster way to send and receive information.

1.1

Problem Statement

Obviously, electronic tax-filing has the potential to benefit both taxpayers and the
government, but only if it is actually used. Although taxpayers still have the option to
choose whether to file their tax return manually or electronically, Government aims to
have a majority of eligible taxpayers to adopt the system. In order to realize the full
potential benefits of electronic tax-filing, it not only depends on the implementation
of this online service but also to understand the taxpayers perception of this
electronic tax-filing system. The effect of taxpayers perception on the electronic taxfiling system will influence their intention to adopt the system or revert back to
manual filing.

Although the electronic tax-filing system is just in its third year of implementation
and are aimed at developing a better and easier electronic tax-filing system, this
3

electronic tax-filing system should not remain unnoticed or underused by the public.
For example, the well-known e-Government service in Taiwan, their online tax filing
and payment system (OTFPS) was launched in 1998 and millions of dollars has been
invested in promoting the system. Unfortunately, the acceptance rates were low with
only 15.05 percent in year 2003 and 21.06 percent in year 2004 (Hung et al. 2006).
Therefore, there is a need for LHDNM to understand whether taxpayers have
accepted the electronic tax-filing system and identify the factors that can affect their
decision to use or not to use this electronic tax-filing system. This is very important
because the answer could help LHDNM to improve its electronic tax-filing system in
the near future.

Since electronic tax-filing system transaction is via Internet and Internet is an open
environment, it is common that taxpayers are exposed to risk (Hoffman et al., 1999).
Taxpayers will be exposed to security threats such as worms, crackers, viruses,
spoofing or password-sniffing. Consequently when taxpayers use the electronic taxfiling system, they will fear that their personal security may be threatened. Obviously,
this will prevent taxpayers from adopting electronic tax-filing system. Thus, LHDNM
is in need of research to identify whether risk factor wills deterrent taxpayers from
using the system.

1.2

Purpose of the Study

The previous section has shown that it is critical to learn how taxpayers perceive this
electronic tax-filing system. Thus, research on the taxpayers perception of the
electronic tax-filing system will enhance the understanding of the individuals beliefs
4

or motives to use the electronic tax-filing system and to show how these factors affect
individuals behavioral intention to adopt the electronic tax-filing system. Since todate, no study has been conducted to evaluate taxpayers perception of using the
electronic tax-filing system in Malaysia, thus this study will be the first study to do so.
As a result, the main objective of this study is to observe the taxpayers perception
that will influence their behavioral intention to adopt electronic tax-filing system in
Malaysia.

Since Technology Acceptance Model (TAM) appears to be the most widely accepted
model that explain the relationship between perceptions and technology use (Agarwal
and Prasad, 1999). In addition to that, Technology Acceptance Model (TAM, Davis,
1989) being proposes in this study because it has been applied in many on-line
contexts to determine user perceptions of system use and the probability of adopting
an online system (Moon and Kim, 2001; Pavlou, 2001). TAM suggested that users
perceptions of both usefulness and ease of use are key determinants of individuals
adoption of technology (Davis, 1989). Since numerous studies have applied TAM to
e-commerce transactions (Lee et al., 2000; Lu et al., 2005), it may also assist in the
understanding of e-service adoption (Hu et al., 1999; Hong et al., 2001-2001;
Featherman and Fuller, 2003; Featherman and Pavlou, 2003; Horst et al., 2007;
Belanger and Carter, 2008). To achieve the main objective of this study, perceived
risk construct being incorporate into TAM. Furthermore perceived ease of use and
perceived usefulness are chosen as construct of interest in this study because these
two perception constructs have been widely examined to explain technology usage
behavior in information system literature.

Electronic tax-filing system is still in the early stages of development and

implementation. As a result, the study findings will be useful as a reference for
LHDNM to increased understanding of taxpayers perception that can be used to
formulate risk-reducing strategies to encourage service adoption. In addition the
findings will also provide LHDNM with information whether to promote electronic
tax-filing system extensively by convincing taxpayers on the area of the security of
the information file, its usefulness or ease of use. Therefore, the second objective of
this study is, the understanding these factors will guide LHDNM to a better planning
and implementation of electronic tax-filing system and to reduce any unnecessary
upgrading or improvement of the system by LHDNM.

1.3

Research Model and Hypotheses

Hence, in this study an extended TAM is recommended as a theoretical framework

that incorporates a new construct, which is perceived risk, with the other two TAM
beliefs, perceived usefulness and perceived ease of use. The proposed research model
is presented in Figure 1.1 below. The proposed model consists of four constructs. The
originally Technology Acceptance Model (TAM) by Daviss consists of attitudes
construct. However, in this study the attitudes construct is taken out to simplify the
model (Davis, 1989; Davis et al., 1989; Chau, 1996; Adams, et al., 1992) because it
did not fully mediate the effect of perceived usefulness (PU) on behavioral intention
(BI) (Venkatesh, 1999). This is supported in the literature review section of this study.

Perceived Usefulness (PU)

H4

H1
H6
Perceived Ease of Use (PEOU)

Behavioral Intention (BI)

H2

H3
H5
Perceived Risk (PR)

Figure 1.1: The Research Model

Many factors have positively and negatively influence a taxpayers decision to adopt
electronic tax-filing as a filing tool. Therefore, several hypotheses regarding
taxpayers adoption of electronic tax-filing based on each construct are proposed
below.

1.3.1

Perceived Ease of Use

Vast research have provided evidence of the significant effect of perceived ease of use
on intention and perceived usefulness (Agarwal and Prasad, 1999; Davis, et al., 1989;
Hu, et al., 1999; Jackson, et al., 1997; Venkatesh, 2000; Venkatesh and Davis, 1996;
Venkatesh and Davis, 2000; Venkatesh and Morris; 2000). In order to promote the
usefulness of the system, electronic tax-filing system need to be both easy to learn and
easy to use. Easy to use information technology will be less threatening to the user
7

(Moon and Kim, 2001). Therefore, this study hypothesized that perceived ease of use
have positive effect on perceived usefulness and behavioral intention to use the
electronic tax-filing system. These results suggest the following hypotheses.

H1:

Perceived ease of use (PEOU) will have a positive effect on perceived

usefulness (PU) of the electronic tax-filing system.

H2:

Perceived ease of use (PEOU) will have a positive effect on behavioral

intention (BI) to use the electronic tax-filing system.

The system ease of use is likely to affect the taxpayers perception of risk usage.
Systems that are perceived to be complex, with steep learning curve are likely to also
be thought of risky to adopt and use. Taxpayers will perceive it as problematic and
not free of effort and could plague with performance problems and usage
uncertainties. On the contrary, if taxpayers perceive the system is easy to use they will
believe it will perform well then will evaluate them positively and probable to adopt
it. Because the system is highly usable and is less likely to cause usage concerns,
therefore perceived ease of use may function as an important risk-reducing factor.
Drawing from the arguments, this study proposes that there is a negative relationship
between perceived ease of use and perceived risk.

H3:

Perceived ease of use (PEOU) will have a negative effect on perceived risk
(PR) of the electronic tax-filing system.

1.3.2

Perceived Usefulness

Numerous empirical studies have already certified the relationship between perceived
usefulness and user acceptance of information systems (Venkatesh and Davis, 1996;
Jackson et al., 1997; Agarwal and Prasad, 1999; Hu et al., 1999; Venkatsh, 1999;
Venkatesh and Morris, 2000; Venkatesh, 2000; Venkatesh and Davis, 2000).
Perceived usefulness of the system will intimidate users intention to use an
information system (Davis, et al., 1989). The main reason taxpayers take advantage
of electronic tax-filing system is because they find the system useful in preparing their
tax return. Hence, this study hypothesizes that perceived usefulness will have a
positive effect on behavioral intention to adopt the electronic tax-filing system.

H4:

Perceived usefulness (PU) will have a positive effect on behavior intention

(BI) to use the electronic tax-filing system.

1.3.3

Perceived Risk

Perceived risk construct in this study is adopted from Featherman and Pavlou (2003)
study on Internet-based bill payment. In this study, the perceived risk construct
comprises seven facets. The seven facets of perceived risk are 1) performance, 2)
financial, 3) time, 4) psychological, 5) social, 6) privacy and 7) overall risk. However,
in this study only two facets are used. They are performance risk and privacy risk. In
Featherman and Pavlou (2003) study, the finding supported the decomposition of the
perceived risk variable into its theorized facets. Performance-related risk facets which
consists of time risk, privacy risk, and financial risk, confirmed to be the most salient
9

concerns for the study sample and context. As for social risk (the chance of losing
status by using the e-service) and psychological risk (the negative effect on the
individuals peace of mind of not achieving the e-service goal), they were not salient
in this study.

Although time risk and financial risk facets are important in Featherman and Pavlou
(2003) study but these two facets are not included in this study because the study on
electronic tax-filing system is only three years old. Example for the financial risk
facet, there is no possibility of monetary loss because the samples in this study
(salaried income category) are under the Scheduler Tax Deduction Scheme (tax
deducted from their monthly salary and remitted to the LHDNM by the employer). If
their monthly tax being correctly deducted then there will be no additional tax that
needs to be paid when they file their tax return. Therefore, the main purpose of
taxpayers adopting electronic tax-filing system is to file their tax return. As for the
time risk facet, this facet is not relevant in this study at this moment because filing of
tax return using electronic methods is still on a voluntary basis.

Electronic tax-filing involve more perceived risk than traditional manual tax-filing. It
is manifested in taxpayers concerns that the electronic tax-filing system will transfer
their personal tax information to third parties without their knowledge or permission.
Although this concern also presents in the physical world but then this online issue
take a vast importance due to the special characteristics of the Internet (Hoffman et
al., 1999; Friedman et al., 2000). Privacy risk in this study refers to, the safeguard of
various types of data that are collected during taxpayers interact with the electronic
tax-filing system.
10

On the other hand, performance risk refers to the possibility of the system
malfunctioning and not performing as it was designed and advertised and which
failing to deliver the desired benefits. The risk factor that taxpayers perceived to
have in the system, which promise to complete their transaction securely and to
maintain the privacy of their personal information will affects their voluntary
adoption of electronic tax-filing system. These combinations of privacy and
performance risk that make up perceived risk have been shown to inhibit service
evaluation (e.g. perceived usefulness) and behavioral intention to adopt. Thus, for the
purpose of this study, perceived risk (PR) is defined as taxpayers perception on the
reliability of the system usefulness/functionality and the control of their personal data
information in an online environment. Therefore, this study tests the following
hypotheses.

H5:

Perceived risk (PR) will have a negative effect on behavioral intention (BI) to
use the electronic tax-filing system.

H6:

Perceived risk (PR) will have a negative effect on perceived usefulness (PU) of
the electronic tax-filing system.

1.4

Scope of Study

This study will be conducted on selected taxpayers in Klang Valley area. The
taxpayers are selected for based on the following requirements. 1) taxpayers who
submit their income tax by filing the BE Form, 2) personally file their annual tax
return, and 3) employment income category taxpayer. This research was conducted
only based on these requirements because electronic tax-filing was initially launched
11

for BE form and for employment income group only. Thus, this group of taxpayers
has been exposed to the system. Taxpayers who file their own tax return were
considered as a sample in this study because of their hands-on experience with the
electronic tax-filing system, thus, their perception on the system will be more accurate
for this study.

1.5

Limitation of Study

This study has several limitations that affect the reliability and validity of the findings.
Firstly, the research model is based on perceived risk (PR), perceived usefulness (PU)
and perceived ease of use (PEOU) and only explains over half of the variance of the
intention to use electronic tax-filing system [R2 = 0.61]. The unexplained 39 percent
of variance suggest that constructs other than those examined in this study are needed
to explain for additional variance.

Secondly, the survey is not representative of the whole Malaysia. The sample in this
survey is only selected from the urban city populations, Klang Valley, who has the
knowledge of electronic tax-filing system. In addition to that, the samples are also
highly educated or were more likely to own and use computers than an average
Malaysian household. Hence, caution needs to be taken when generalizing this
research results to user groups in other geographical areas.

12

1.6

Organization of the Study

The outline of this research project is as follows.

Chapter One Introduction

This is an overview of the chapter of this study. It covers introduction, the problem
statement, the purpose and significance, research model and hypotheses, scope of
study and limitation of study.

Chapter Two Literature Review

This chapter discusses the related and relevant literature which discusses the use of
Technology Acceptance Model (TAM) and the new variable perceived risk, to
examine taxpayers perception toward adoption of electronic tax-filing system.

Chapter Three Research Methodology

This chapter explains the selection of measures, sampling of designs, data collection
procedures and data analysis techniques.

13

Chapter Four Research Findings

This chapter presents the overall findings of the study. It summarizes the statistics of
the respondents, results of the hypotheses analysis and discussion of the research
findings.

Chapter Five Conclusion and Recommendation

This is the last chapter of the study, which concludes the study by summarizing the
findings and provides some suggestion for future research. Implications of the study
are also presented in the study.

14

2. LITERATURE REVIEW

In this chapter, prior research that uses Technology Acceptance Model (TAM) is
examined. The literature on the integration of perceived risk variable with the basic
TAM variables (i.e. perceived usefulness and perceived ease of use) is also discussed.

2.1

Technology Acceptance Model (TAM)

Similar to any other e-commerce applications, electronic tax-filing is an information

system (IS) application where the user will interact with a complex information
technology (IT) system. Therefore in this study of taxpayers perception of adopting
the electronic tax-filing system, the focus must on the influence of information
technology to taxpayers usage intention. Theoretical model such as Theory of
Reasoned Action (TRA) (Ajzen and Fishbein, 1980), the Theory of Planned Behavior
(TPB) (Ajzen, 1991), and the Technology Acceptance Model (TAM) (Davis, 1989;
Davis et al., 1989), attempt to explain the relationship between user beliefs, attitudes,
intentions, and actual system use. Among these theories, TAM was widely used and
accepted to explain the relationship between perceptions and technology use (Agarwal
and Prasad, 1999; Morris and Dillon, 1997).

According to the Theory of Reasoned Action (TRA) model, beliefs manipulate

attitudes which consecutively lead to intentions and then formulate behaviors. TAM
originally developed by Davis from the theoretical foundation of TRA, adapts this
belief-attitude-intention-behavior relationship to an IT user acceptance. As a result,

15

the use of TAM is to explain and predict information technology (IT) acceptance and
facilitate design changes (Davis, 1989).

According to TAM as illustrated in Figure 2.1, the acceptability of an individual

toward a particular system is determined by users beliefs about the system. The two
beliefs are perceived usefulness (PU) and perceived ease of use (PEOU). PU defined
as the users perception of the degree to which using the system will improve his or
her performance in the workplace. PEOU defined as the users perception of the
amount of effort needed to use the system. These two beliefs will influence
individuals behavior intention (BI) to use computer technology (Davis, et al., 1989).

Perceived
usefulness (PU)

External
variables

Attitude

Behavioral
Intention

Perceived ease
of use (PEOU)

Figure 2.1: Daviss Technology Acceptance Model

According to Davis (1989), perceived usefulness (PU) is shown as a primary

determinant and perceived ease of use (PEOU) as a secondary determinant of
intentions to use technology. However, in Wang (2002) study of electronic tax-filing
in Taiwan, the findings found that perceived ease of use (PEOU) was a stronger
16

predictor of peoples intention to e-file than both perceived credibility and perceived
usefulness (PU). The study also found the new TAM construct (perceived credibility)
to have a stronger influence on behavioral intention than the traditional TAM
construct (perceived usefulness) in the context of electronic tax filing. But according
to Fu et al., (2006) which observed on taxpayers intention to adopt a particular tax
filing method, the finding shows across the three kinds of taxpayers, behavioral
intention was largely driven by perceived usefulness. In the study by Wixom and
Todd (2005), the findings found that perceived usefulness (PU) was influenced by
perceived ease of use (PEOU).

In prior research, the effect of perceived usefulness and perceived ease of use on
intention for current system usage has been studied (Adam, et al., 1992; Davis, 1989;
Davis, et al., 1989). Additionally, perceived usefulness is influenced by perceive ease
of use to the extent that the system must be easier to use and more useful (Davis, et
al., 1989; Venkatesh, 1999; Venkatesh and Davis, 2000). Moreover, prior researches
have showed evidence of the significant effect of perceived ease of use on usage
intention (Agarwal and Prasad, 1999; Venkatesh, 1999; Venkatesh and Morris, 2000).
On the other hand, there are also studies on information system (IS) that support the
significant effect of perceived usefulness on the usage intention (Venkatesh and
Davis, 1996; Agarwal and Prasad, 1999; Venkatesh and Morris, 2000; Venkatesh and
Davis, 2000). As according to Davis, future technology acceptance research needs to
address how other variables affect usefulness, ease of use and user acceptance (Moore
and Benbasat, 1991; Mathieson, 1991; Davis, 1989; Davis et al., 1989; Taylor and
Todd, 1995). However, factors affecting the acceptance of new information

17

technology are likely to vary with the technology, target users and the context (Moon
and Kim, 2001).

The attitude construct was left out from the original TAM model (Davis, 1989; Davis
et al., 1989) because it did not fully mediate the effect of perceived usefulness on
behavioral intention (BI) (Venkatesh, 1999). Based on other several studies (Adam, et
al., 1992; Gefen and Straub, 1997; Mathieson, 1991; Straub et al., 1995; Venkatesh
and Morris, 2000) the effect of perceived ease of use (PEOU) or perceived usefulness
(PU) on the attitude construct and/or behavioral intention (BI) have been disregarded.
Instead, the impact of perceived ease of use (PEOU) and/or perceived usefulness
directly on the actual system usage have being focus. As in this study focuses is on
taxpayers behavioral intention to use the electronics tax-filing system, the technology
acceptance model (TAM) was adapted by dropping the attitude construct.

Many researches have utilized TAM as a base model to predict adoption. TAM has
been applied to different technologies and added new variables. With regards to
technology originally, TAM was used to investigate email, word processing and
graphic software (Davis, 1989; Davis et al., 1989). Then TAM extended its
application to various types of information system (IS), such as spreadsheets (Doll et
al., 1998; Mathieson, 1991; Venkatesh and Davis, 1996), voice mail (Adam et al.,
1992; Chin and Todd, 1995; Segars and Grover, 1993; Straub et al., 1995;
Subramaniam, 1994), telemedicine (Hu et al., 1999), personal computing (Agarwal
and Prasad, 1999), database management system (DBMS) (Doll et al., 1998; Szajna,
1994; Szajna, 1996) and some other software such as Virtual Workplace System, and
proprietary system (Venkatesh, 1999; Venkatesh and Morris, 2000; Venkatesh and
18

Davis, 2000). Furthermore several recent studies (Featherman and Pavlou, 2003;
Featherman and Fuller, 2003; Fu et al., 2006; Hong et al., 2001; Moon and Kim,
2001; Wang, 2002) have examined TAM to analyze user behavior on the Internet,
specifically the world-wide-web (WWW) and e-services (electronic tax filing, epayment, digital libraries, e-commerce). However, there are researchers beginning to
study e-government adoption using TAM (Horst et al., 2007).

As for the added new variables to TAM, variables such as self-efficacy (Venkatesh
and Davis, 1996; Wang, 2002), effectiveness (Segars and Grover, 1993; Chin and
Todd, 1995), social presence and information richness (Straub et al., 1995; Gefen and
Straub, 1997), subjective norm (Venkatesh and Morris, 2000; Venkatesh and Davis,
2000; Featherman and Fuller, 2003), job relevance (Venkatesh and Davis, 2000),
image (Venkatesh and Davis, 2000), quality (Venkatesh and Davis, 2000), perceived
credibility (Wang, 2002), perceived playfulness (Moon and Kim, 2001), perceived
user resources (Mathieson et al., 2001), compatibility (Chen et al., 2002) and
perceived risk (Featherman and Pavlou, 2003; Featherman and Fuller, 2003; Fu et al.,
2006 and Horst et al., 2007) have been incorporated into an extended TAM.

2.2

Perceived Risk

While the electronic services is convenient and creates efficiencies for their users,
little is understood about how consumers perceive them. Furthermore the
development of electronic services will increase the trade-off between as the levels of
services increase, the level of risk will also increase. These risks are the result of two
processes. They are, (a) information that is sent electronically, and (b) information
19

that is stored electronically. In addition to that, the coupling of electronic data is much
simpler as compare to traditional types of data storage. This means that third parties
can capture, read and modify the information as they are being transmitted or stored.
For example, in the case of electronic burglary, large quantities of subtle information
can be obtain or wipe out quickly and easily without the publics consent.

Since risk is difficult to measure objectively, the literature focuses on users risk
perceptions. Perceived risk can be defined as the potential for loss in the pursuit of a
desired outcome of using an e-services (Featherman and Pavlou, 2003, pp. 454).
Perceived risk is composed of behavioral and environmental uncertainty (Pavlou,
2003). Behavioral uncertainty occurs because online service providers may behave in
an opportunistic manner by taking advantage of the impersonal nature of the
electronic environment and the inability of the government to monitor adequately all
transactions. Examples of opportunistic manner by online service providers include
services/products

misrepresentations,

false

identity

demonstrations,

private

information leaks and denunciations of warranties. Thus, behavioral uncertainty

creates;
1. economic risk because of the possibility of monetary loss,
2. personal risk because of potentially unsafe services/products,
3. provider performance risk because of imperfect monitoring, and
4. privacy risk because of the opportunity to disclose users private
information.

Whereas, environmental uncertainty happens is due to the unpredictable nature of

Internet-based technology that is beyond the control of the users or the provider
20

(Pavlou, 2003). Although provider play an important role on the security of the
transaction medium (encryption, authentication, firewalls), there is still the likelihood
of third parties intimidate the transaction process. Examples of environmental
uncertainty are theft of credit card information, breaches of private information and
stealing of personal information by hackers. Hence, environmental uncertainty
includes;
1. economic risk because of the opportunity for monetary loss, and
2. privacy risk because of the possibility of theft or private information or
illegal disclosure.

Perceived risk reduces users intentions to exchange information and complete

transactions (Pavlou, 2003). Therefore, it is very common when potential adopters
engaged Internet as the transaction medium, their concern on risk will surface and
become prominent to them (Hoffman et. al., 1999).

However, in Belanger and Carter (2008) study on e-government adoption, perceived

risk perception did not decrease citizens intention to use an e-government service.
This finding is incongruent with the e-commerce literature. The argument made was
there are differences between commercial businesses and government agencies
existence. As for e-commerce it mainly focuses on profit and target market whereas
for e-government the focuses are on service and population at-large. Their other
argument were, maybe the perceived risk construct is more common in e-commerce
than in e-government.

21

2.3

Perceived Risk and TAM relationship

There are several studies that do attempt to deal with the issue of users risk perception
on the acceptance of e-services using Technology Acceptance Model (TAM). The
connection between perceived risk and TAM has been discussed in literature that the
relationship between perceived usefulness (PU), perceived ease of uses (PEOU) and
perceived risk (PR). The extended TAM with perceived risk constructs have been
used to predict e-service adoption (Featherman and Pavlou, 2003; Featherman and
Fuller, 2003), online application (Lu et al., 2005), e-commerce adoption (Lee at al.,
2000; Pavlou, 2003) and e-government adoption (Horst et al., 2007).

In the e-service study (Featherman and Pavlou, 2003), perceived risk comprises of
seven (7) facets being used to study Internet-based bill payment services evaluation
and adoption. The results indicated each risk facet negatively correlated with
perceived usefulness (PU) and adoption intention. However, performance related risk
facets (time risk, privacy risk, financial risk) proved to adversely affect e-services
adoption and perceived ease of use of the e-services can reduced these risk concerns.
The findings concluded that perceived risk is a very influential variable on TAM for
e-services.

In Featherman and Fuller (2003), the study on consumer adoption of e-service with an
additional construct perceived risk was added to TAM.

The higher levels of

perceived risk inflated perceived usefulness and adoption intention. Whereas the
higher levels of perceived risk deflated ease of uses effect. The relationship between
perceived risk and ease of use is supported in Featherman and Pavlou (2003) study.
22

However, in the study of online application context (Lu et al., 2005), the findings
indicated perceived risk plays a key factor in influencing the determinants of online
application adoption such as perceived usefulness and attitude. Unfortunately,
perceived risk does not directly affect intention to use online applications but
indirectly through perceived usefulness and attitude constructs. Surprisingly, in this
study, the findings showed there is no relationship between perceived risk (PR) and
perceived ease of use (PEOU). This is inconsistent with the earlier two studies.

In Lee et al., (2000) study, e-Commerce Adoption Model (e-CAM) was integrated
with TAM with the theories of perceived risk to explain the adoption of e-Commerce.
This study examines the impact of the following factors (perceived ease of use,
perceived usefulness, perceived risk with products/services, and perceived risk in the
context of online transaction) on the consumers purchasing behavior. The results
showed perceived usefulness (positively affect), perceived risk with products/services
(negatively affect) and perceived risk in the context of online transaction (negatively
affect) significantly affect on consumers adoption of e-commerce. However,
perceived ease of use has no direct effect on adoption but has indirect effect on the
adoption through the mediating construct perceived usefulness.

In Pavlou (2003) perceived risk variables were integrated into the Technology
Acceptance Model (TAM) to predict consumer acceptance of e-commerce. The
findings from this study showed that perceived risk directly influence intention to
transaction. As consistent with prior research, perceived usefulness and perceived
ease of use have a significant effect on transaction intentions.

23

As suggested by Warkentin et al. (2002), perceived risk will also have an identical
effect on e-government. However, very few researchers have conducted a study on egovernment with the integration of perceived risk construct into TAM. The only study
that has been found is Horst et al., (2007). Horst et al., (2007) identified the role of
risk perception in the intention to adopt government e-services. Study on intention to
adopt e-government services also conducted with the additional construct (trust,
personal experience, perceived behavioral control and subjective norm). Perceived
usefulness construct was measured in relation to e-service in general as well as egovernment services. The findings showed that perceived usefulness of e-services in
general is the main determinant of the intention to use e-government services. Even
perceived usefulness of e-government services and the subjective norm are correlated
significantly but the intention to adopt was weak. Whereas, risk perception, personal
experience, perceived behavioral control and subjective norm were found to
significantly predict the perceived usefulness of electronic services. Perceived
usefulness was the main determinant of e-government services.

Although TAM has been applied to a wide range of information technology

(Venkatesh and Davis, 2000), very few researcher have studied the adoption behavior
of electronic tax-filing systems using the TAM framework. However, two studies
(Wang, 2002; Fu et al., 2006) have been found that have studied electronic tax-filing
adoption behavior using TAM framework. In Wang (2002), a new construct perceived
credibility being proposed, to enhance the understanding of an individuals
acceptance behavior of electronic tax-filing system. This study also discovered the
individual difference variable (computer self-efficacy) that has a significant result
through the TAM framework on potential users intention to use and electronic tax24

filing system. Furthermore, this study found that the new construct perceived
credibility have a stronger influence on behavioral intention than the traditional TAM
construct, perceived usefulness, in the context of electronic tax-filing system.

In Fu et al., (2006) the filing of personal income tax in Taiwan was used as an
example of e-government services, the study integrated two important theories which
were Technology Acceptance Model (TAM) and Theory of Planned Behavior (TPB).
Purpose of the study was to discuss the factors affecting taxpayers intention to adopt
a particular tax-filing method (manual, tow-dimensional barcode or Internet). The
result finding showed that taxpayers tend to concentrate on the usefulness of a taxfiling method.

2.4

Summary of Literature Review

The Technology Acceptance Model (TAM) is considered the most influential and
commonly employed theory for describing an individuals acceptance of information
systems. Many studies applied the TAM to focuses on the attitudinal explanation of
individual intentions to use a specific technology or service. TAM assumes that an
individuals information systems acceptance is determined by two major variables,
perceived usefulness and perceived ease of use. TAM has been applied to different
technologies under different situations with different control factors and different
subjects. The focus in this literature review is to examine the extended TAM with the
additional construct perceived risk on e-services, e-commerce and e-government
adoption. The finding from prior studied have shows a difference concluding results.
In Featherman and Pavlou (2003) and Featherman and Fuller (2003) study on e25

payment adoption, perceived risk negatively affect on perceived ease of use.

However, in Lu et al., (2005) study, there is no significant relationship between
perceived risk and perceived ease of use construct. In Lee et al., (2000) perceived ease
of use found to has no direct effect on adoption but has indirect effect through
perceived usefulness. Whereas in the two studies on electronic tax-filing system
adoption (Wang, 2002; Fu et al., 2006), one study found perceived usefulness is a
strong determinant for adopting a tax filing method (Fu et al., 2006) and the other
(Wang, 2002) found the additional construct in TAM to be the strong determinant of
adopting a tax-filing system.

26

3. RESEARCH METHODOLOGY

The survey approach was adopted for this study. Selection of measures, sampling
designs, data collection procedure and data analysis technique are presented below.

3.1

Selection of Measures

The survey instrument is a three page questionnaire survey, divided into three
sections. A sample of the questionnaire is found in the Appendix. Section A of the
questionnaire measures the taxpayers perception on the electronic tax-filing system
and their behavioral intention to adopt. It has 3 constructs, which are perceived
usefulness (PU), perceived ease of use (PEOU), and behavioral intention (BI). In this
study, 4 statements each from PU and PEOU constructs were extracted from Hung et
al., (2006) study and 2 statements of BI were extracted from the study of Wang
(2002), Davis (1989) and Davis et al., (1989).

In section B, perceived risk of taxpayers were measured using two different

dimensions consisting of 6 items. The dimensions were performance risk and privacy
risk. Each dimension has three statements. These 6 items were extracted from the
study of Featherman and Pavlou (2003). However, some modifications have been
made to the questions on perceived risk (PR) to suit to electronic tax-filing system
study.

In Featherman and Pavlou (2003) study, PR1, PR2, and PR5 statements were
measured using semantic differential scales. In this study, the three statements were
27

modified to a 7-point Likert Scales ranging from strongly disagree to strongly

agree to be consistent with Section A. In order to made this modification, first, PR1
statement was amended from what are the chances that using an XXXX will cause
you to lose control over the privacy of your payment information? to chances of
using e-Filing system will cause me to lose control over the privacy of my personal
information. Next, PR2 statement was amended from my signing up for and using
an XXXX would lead to a loss of privacy for me because my personal information
would be used without my knowledge to by using e-Filing system my personal
information would be used without my knowledge. Lastly PR5 statement was
changed from considering the expected level of service performance of the XXXX,
for you to sign up for and use it would be to considering the expected level of
service performance of the e-Filing system, using it will be risky.

Section C of the questionnaire was designed to examine taxpayer preference on taxfiling method using closed ended multiple choice format. This section includes a
taxpayer profile on information technology (IT). The two individual characteristics
are computer experience and Internet experience. In addition, three questions were
included to screen whether all respondents have met the required criteria of eligible
taxpayers in this study. The three criteria are; 1) taxpayers personally file their own
tax return, 2) filing through BE Form, and 3) employment income category.

28

3.2

Sampling of Designs

Convenience sampling method was used for the study and the sample size is 200
respondents. The targeted respondents were eligible taxpayers in Klang Valley
because Klang Valley is the most developed region in Malaysia and has the largest
portion of eligible taxpayers in the country.

3.3

Data Collection Procedures

The data collection method employed in this survey was by distributing

questionnaires through email and mail. Every effort was made to ensure to meet
effective response rate of 200 respondents; with the use of personal visits, phone calls,
emails, covering letters and reminders were made. Respondents were willing to
participate and all questionnaires were answered anonymously. No specific locations
were targeted in the region of Klang Valley for the sampling.

3.4

Data Analysis Techniques

Statistical Package for Social Science (SPSS) version 13 and Analysis of Moment
Structure) AMOS for Windows (version 7.0) was used to analyze the data. Structural
equation modeling (SEM) using the AMOS software encompasses diverse statistical
techniques such as path analysis, confirmatory factor analysis, causal modeling with
latent variables, and even analysis of variance and multiple linear regression. AMOS
is a covariance-based approach, in which the covariance structure derived from the
observed data is used to simultaneously fit measurement and structural equations
29

specified in the model. AMOS estimated both the measurement and structural models
using the full information maximum likelihood estimator.

In this study, the internal consistency reliability is measured by applying the

Cronbachs alpha test (SPSS version 13) to the individual scales. The construct
validity of the models scales is evaluated using confirmatory factor analysis (CFA)
and AMOS with maximum likelihood estimation is used to perform this analysis on
the data. CFA was considered as more appropriate than exploratory factory analysis
because the scales employed in this study were already validated in Lu et al., (2005)
and Featherman and Wells (2004) study.

Following convergence, this study must evaluate the goodness-of-fit criteria too.
Goodness-of-fit tests are used to determine whether the model should or should not be
rejected. If the model is not rejected, then this study will continue the analysis and
interpret the patch coefficients in the model. Several different types of goodness-of-fit
measures will be use. For example, the commonly reported fit statistics are the chisquare, its degrees of freedom (DF), its probability value (P), the Tucker-Lewis Index
(TLI), and the Root Mean Square Error of Approximation. Lastly is to examine the
significance of each hypotheses and results are presented in the form of path
diagrams, which are graphic illustrations of the measurement and structural models.

30

4. RESEARCH FINDINGS

This section reports the findings of the data analyses. It begins with the description of
the respondents characteristics. This is followed by reliability and validity of scale
and descriptive statistics. Next, the effects between behavioral intention to adopt
electronic tax-filling system and the three constructs by using the structural equation
modeling (SEM) approach are discussed. Lastly, the results of the regression analysis
are presented.

4.1

Characteristics of the Respondents

A total of 182 sets of questionnaires were received. Out of 182 sets, 16 sets of the
questionnaires were not usable due to incomplete answers or did not meet the survey
requirements of targeted employment income category only. As a result, the final
questionnaires analyzed consisted of only 166 respondents. A complete demographic
profile of the respondents is presented in Table 1.

In terms of filing method, the sample showed an increase number of respondents to

fill their tax return through the electronic way. In last year result finding (adoption in
year 2006), indicates only 36 (21.7%) respondents adopted the system to fill their tax
return. However in this year results (adoption in year 2007), indicates an increased to
72 respondents (43.4%). Taxpayers behavioral intention to adopt the system showed
a positive sign with the results finding indicates a further increase to 95 respondents
(57.2%) that will adopt the system to fill their next year tax return (adoption in year

31

2008). This indicates a good improvement of taxpayers begin to accept the electronic
tax-filing system launched by Lembaga Hasil Dalam Negeri Malaysia.

Table 4.1: Respondents by Method of Filing

Method of Filing
Last Year (Year 2006)

Manual
Frequency
130

Internet
Frequency
36

%
78.3

%
21.7

This Year (Year 2007)

94

56.6

72

43.4

Next Year (Year 2008)

71

42.8

95

57.2

Table 4.2: Respondents Characteristics

Item
Personally File
Yes

Frequency

147

88.6

No

19

11.4

Computer Experience
None

1.8

1 3 years

2.4

4 -6 years

15

9.0

7 9 years

32

19.3

10 years or above

112

67.5

Internet Experience
None

1.8

1 3 years

16

9.6

4 6 years

33

19.9

7 9 years

53

31.9

10 years or above

61

36.7

Form Type
Form BE

139

83.7

Form B

27

16.3

Income Type
Salaried based income

166

100.0

32

With regard to whether respondents will personally file their own tax return, the
sample showed 147 (88.6%) of the respondents filed their own tax return. Only 19
(11.4%) respondents did not file their own tax return. These 19 respondents tax return
could be using a tax practitioner to e-file on their behalf.

Regarding computer experience, two-thirds of the respondents (67.5%) had 10 years

and above of computer experience, 19.3% had 7-9 years, 9% had 4-6 years, 2.4% had
1-3 years. Only 1.8% (3 respondents) did not have any computer experience. In terms
of Internet experience, the study found that respondents with 7 years and above
accounted for 68.6%. Out of 68.6%, 61 (36.7%) were respondents with 10 years and
above Internet experience. 19.9% had 4-6 years, 9.6% had 1-3 years and 1.8% had
zero experience.

In order to target a correct respondent for this survey, question on the type of form
and income type items had been included in the survey form. The targeted
respondents are from the salaried based income group and will file their tax return
through Form BE. This group of respondents is the target for this survey because the
electronic tax-filing system was first launch for Form BE and not Form B. 166
respondents in this survey are salaried based income with 139 (83.7%) respondents
file their tax return through Form BE.

33

4.2

Reliability of scale and descriptive statistics

Reliability refers to the extent to which the questionnaire is free from measurement
error. Cronbachs coefficient alpha was engaged to examine the internal reliability for
the four (4) constructs which comprise sixteen (16) items. According to Nunally
(1978) psychometric theory, alpha near 0.9 represent highly consistent scales, those
score near 0.7 reflect a moderate level of consistency, and alphas below 0.3 indicate
that item have little in common. As shown in Table 4.3, the alpha coefficients for
perceived ease of use, perceived usefulness, perceived risk and behavioral intention to
adopt were 0.95, 0.96, 0.96 and 0.98 respectively. This indicates that the developed
scales in this research are highly reliable and acceptable.

Table 4.3 also exhibits relevant calculated descriptive statistics. The mean perceived
risk tends to be at par with perceive ease of use and perceived usefulness. Taxpayers
responded positively to the ease of use in adopting the electronic tax filing system.
This response confirmed that taxpayers perceive that the electronic tax-filing system
is easy to use. In addition, even though taxpayers perceived the electronic tax-filing
system is risky, they still perceived the system is easy to use and useful. Furthermore,
the finding showed that taxpayers had positive intention to adopt electronic tax-filing
system.

Table 4.3: Descriptive statistics and scale reliability

Constructs
Perceived Ease of Use
Perceived Usefulness
Perceived Risk
Behavioral Intention to Adopt

Items
4
4
6
2

Mean
4.80
4.55
4.75
4.77

Cronbachs
0.946
0.955
0.957
0.976
34

4.3

Construct Validity

Construct validity is created by showing that the measure is an appropriate operational

definition of the construct it purports to be measuring. A confirmatory factor analysis
(CFA) using AMOS was conducted to test the measurement model. Even the purpose
of goodness-of-fit test is to determine if the model being tested should be accepted or
rejected, however, these overall fit tests do not establish that particular paths within
the model are significant.

Table 4.4: Results of the model goodness-of-fit

Fit Index
Chi-square (2)
Degrees of freedom (df)
P
2 / df
Goodness-of-fit index (GFI)
Adjusted goodness-of-fit index (AGFI)
Comparative fit index (CFI)
Tucker-Lewis index (TLI)
Root mean square error of approximation (RMSEA)

Recommended
Values
n/a
n/a
Non significant
3.00
0.90
0.80
0.90
0.95
0.10

Results in
this study
246.72
98
< 0.001
2.52
0.85
0.79
0.96
0.95
0.09

As can be seen from Table 4.4, overall model fit is adequate. A Chi-square (2)
statistic is to tests the proposed model against the general alternative where all
variable are correlated. With this index, significant values indicate poor model fit,
whereas non-significant values indicate good fit. As in this study the test of overall
model fit resulted in a 2 value of 246.72 with 98 degrees of freedom and a
probability value of less than 0.001. The p-value being significant indicated the
absolute fit of the model is less than desirable. Because the chi-square test of absolute
35

model fit is sensitive to sample size and non-normality like in this study, the statistic
may lead to inaccurate probability value (Chau, 1997). Thus a better measure of fit is
2 over degrees of freedom which provide an indication of the fit of the model per
degree of freedom used. For this statistics, smaller values indicate a better fit. Thus,
ratio for the model is within the suggested 3 to 1 bracket (Chin and Todd, 1995). As
shown in table 4.4, the value of 2/df is around 2.518, which is below the desired
cutoff value of 3.0 as recommended.

As there is no single recommended measure of fit for the structural equation model
(SEM), a variety of measures are proposed by numerous literature to assess the
relative fit of the data to the model (Adams et al., 1992; Chau, 1997; Chin and Todd,
1995; Hu et al., 1999; Segar and Grover, 1993; Subramaniam, 1994). They
recommended the use Goodness-of-fit index (GFI), the Adjusted Goodness-of-fit
Index (AGFI) (for sample size), Comparative Fit Index (CFI), Tucker-Lewis Index
(TLI) and Root Mean Square Error of Approximation (RMSEA).

The GFI, TLI and the CFI compare the absolute fit of a specified model to the
absolute fit of the independence model. The greater the discrepancy between the
overall fit of the two models, the larger the values of these descriptive statistics. The
GFI should be at or above 0.90 (Hoyle, 1995), while the CFI statistic should be at or
above 0.90 but a CFI above 0.95 is considered to be an exceptional fit (Hoyle, 1995).
As shown in Table 4.4, the GFI value is 0.85 which is below the recommended value.
However the CFI value of 0.96 is not only above the recommended value but also
considered to be outstanding fit for this model. TLI is more restrictive therefore it

36

requires a value of 0.95 or above (Hu and Bentler, 1999). In this study, TLI recorded a
value of 0.95 which meet the required value.

AGFI is a variant of GFI which adjusts GFI for degrees of freedom. The
recommended value for AGFI should be at or above 0.80 (Chin and Todd, 1995;
Segars and Grover, 1993). Hence, the AGFI value for this model is 0.79 which is
slightly below 0.80. Finally, RMSEA which measures the discrepancy per degree of
freedom and should be below 0.10 but has also been suggested to represent a very
good fit if below the more restrictive threshold of 0.08. This last index also supported
the overall fit for the model with RMSEA value at 0.09. Therefore, this model is
rationally acceptable to evaluate the results for the SEM technique.

37

4.4

Evaluating the hypothesized model

PU1

0.82 ***

PU2

0.93 ***

PU3

0.96 ***

PU

0.92 ***

PU4
H1

PEOU1

0.84 ***

PEOU2

0.94 ***

PEOU3

(0.81 ***)

BI1

H4 (0.40 ***)

0.96 ***
H2 (0.38 ***)

PEOU

0.91 ***

BI

R = 0.61

0.93 ***

0.99 ***

PEOU4
PR1

0.86 ***

PR2

0.92 ***

PR3

0.88 ***

PR4

0.90 ***

H3

(-0.08)
H5 (-0.15 ***)

BI2

H6 (-0.32 ***)

PR

0.93 ***

PR5
PR6

0.84 ***

denotes not significant

*** denotes significance at the p < 0.01

Figure 4.1: Results of the Study Framework

The first step in model estimation involved examining the model fit results of the
hypothesized model. A similar set of indices were used (see Table 4.4). Comparison
of all fit indices with their matching recommended values provided evidence of a
good model fit (2/df = 2.52, AGFI = 0.79, CFI = 0.96, TLI = 0.95, RMSEA = 0.09).

38

The second step in the model estimation was to examine the significance of each
hypothesized path and the results are presented in the form of path diagrams. Figure
4.1 displays all structural relationships among the studied constructs. The figure
indicates that variance in electronic tax-filing system adoption intention explained by
the model is 61 percent. Variance in taxpayers intention to adopt electronic tax-filing
system was 61 percent explained by perceived usefulness ( = 0.81), perceived ease
of use ( = 0.38) and perceived risk ( = -0.15) constructs. In this context of adopting
electronic tax-filing system, all items in perceived usefulness, perceived ease of use
and perceived risk construct significantly in explaining variance of the three construct
toward electronic tax-filing system adoption.

As shown in Figure 4.1, hypotheses H2 and H4 were supported with that both
perceived ease of use and perceived usefulness have a significant positive effect on
behavioral intention. Like many past studies, perceived usefulness found to be more
powerful predictor of behavioral intention than perceived ease of use. These results
were consistent across technologies. However in this study, perceived usefulness ( =
0.40) showed a slightly stronger predictor to behavioral intention than perceived ease
of use ( = 0.38). In fact, perceived ease of use has a strong effect on perceived
usefulness ( = 0.81), validating H1 and allowing the suggestion that ease of use
promote the electronic tax-filing system usefulness.

Perceived risk was also a significant predictor of behavioral intention and this
supporting H5. This means that the risk factor will reduce taxpayers intention to
adopt electronic tax-filing system (Pavlou, 2001; Pavlou, 2003; Featherman and
Fuller, 2003). The relatively weak effect of perceived risk ( = -0.15) on behavioral
39

intention to adopt suggest that perceived risk might influence indirectly through
perceived usefulness ( = -0.32), which validate H6. This negative effect between
perceived usefulness and perceived risk toward adopting a system is confirmed here
and also by other studies (Featherman, 2001; Pavlou, 2003; Featherman and Fuller,
2003; Featherman and Pavlou, 2003).

In H3, the negative effect of perceived ease of use on perceived risk was significant
but the path was not significant. Therefore the hypothesis was not supported. This was
supported by the covariance results (Table 4.5) which also support the significant of
H1 and H6. The results showed there was no correlations between construct perceived
ease of use and perceived risk with the p = 0.323. On the other hand, for H1 and H6,
results showed there is a correlation between the constructs with the p = 0.000.

Table 4.5: Covariance Results

Hypothesis Casual Relationship
S.E
C.R
P

H1
1.528
0.204
7.484
0.000
PU PEOU
H3
-0.153
0.155
-0.989
0.323
PEOU PR
H6
-0.568
0.155
-3.655
0.000
PU PR
= Regression coefficient; S.E = Standard of Error of ; C.R = Critical Ratio (/S.E), P =
Statistical Significance of the Test

4.5

Summary of Results

Perceived usefulness, perceived ease of use and perceived risk were shown to be an
important construct to influence taxpayers perceptions on the electronic tax-filing
system. However, in this study, the extended TAM which includes the perceived risk
construct was found to have a negative influence on behavioral intention in the
40

context of electronic tax-filing. Given the fact that adoption of the electronic tax-filing
system is voluntary, the findings suggest that in order to attract more users to use the
electronic tax-filing system, it is not enough just to develop a useful and easy to use
system to interact with. It is also important to develop an electronic tax-filing system
that is boundless from performance and privacy risk.

The findings also suggest that perceived risk is strongly negatively related to
perceived usefulness. This means that, if taxpayers perceived that the electronic taxfiling system is risky then the perception on usefulness of the system will decrease.
Thus, if taxpayers perceived the electronic tax-filing system as not useful then their
behavioral intention to adopt the system will also decrease. This means, in order to
attract taxpayers to adopt electronic tax-filing system, LHDNM has to give the
assurance and confidence to taxpayers that the systems is safe and risk free. LHDNM
should also focus on improving the system usefulness and promote to taxpayers that
by using the electronic tax-filing system will improve their performance, productivity
and effectiveness in preparing income tax filing.

However, the relationship between perceived risk and perceived ease of use was not
significant. Although the path was not significant but the prediction on the sign of
coefficient was correct. It showed ease of use of electronic filing system indeed will
reduce taxpayers risk perception. This send a strong message to LHDNM that even
the path was not significant in this study but ease of use do play a role as risk reducing
factor on taxpayers perception.

41

5. CONCLUSION AND RECOMMENDATIONS

5.1

Discussion

Government in the 21st century has benefited greatly from information technology in
many ways. Electronic tax-filing is one of many e-government services provided by
the Malaysian government. Therefore it is important to understand taxpayers
perception and to seek ways to encourage taxpayers adoption of electronic tax-filing
system. The acceptance of taxpayers on the electronic tax-filing will give an
enormous cost savings and annual investment in technology.

To date, no study has been conducted to study taxpayers perception on Malaysian

electronic tax-filing system which is in its third year of implementation. This study is
a preliminary study to examine or understand taxpayers perception on our Malaysian
electronic tax-filing system. The aim of this study is to predict the intention to adopt
electronic tax-filing system among taxpayers from Klang Valley area. They were
asked to complete a questionnaire that was based on perceived ease of use, perceived
usefulness and perceived risk of the electronic taxfiling system. This study uses the
Technology Acceptance Model (TAM) to explain the three constructs. Six
hypothetical situations were proposed in this study and five were found to be
significant.

42

5.1.1

Prediction of behavioral intention to adopt electronic tax-filing system

Behavioral Intention = f (usefulness, ease of use, risk)

The findings from this study indicated that perceived risk, perceived usefulness and
perceived ease of use explained 61 percent of the variance in behavioral intention to
adopt electronic tax-filing system using extended TAM. Structural equation modeling
with AMOS revealed that the behavioral intention to adopt electronic tax-filing
system is highly predicted by perceived usefulness ( = 0.40) and followed by
perceived ease of use ( = 0.38). This indicated that perceived usefulness explained
more of the variance in behavioral intention to use electronic tax-filing system. In
most of the literature (Hong et al., 2001; Fu et al., 2006; Lallmahamood, 2007; Horst
et al., 2007), perceived usefulness has been a consistently strong determinant of usage
intention.

Technology Acceptance Model (TAM) can be extended into consumer online

behavior to explain the acceptance of business-to-consumer (B2C) e-commerce
because perceived usefulness and perceived ease of use have a significant effect on
transaction intentions (Pavlou, 2003). Since this present findings also found perceived
usefulness ( = 0.40) and perceived ease of use ( = 0.38) to significantly affect
taxpayers behavioral intention to adopt, therefore, it can be concluded that
Technology Acceptance Model (TAM) also can be extended into users behavior to
explain the behavioral intention to adopt electronic tax-filing system. This is be
supported by Wang (2002) on the adoption of electronic tax filing systems in Taiwan.

43

The findings also showed perceived usefulness and perceived ease of use significantly
effect on behavioral intention.

The adoption of electronic tax-filing is currently on a voluntary basis. Electronic taxfiling involves the transmission of highly sensitive personal information and there is a
risk that users information will falls into third parties. This risk influence the user
intention to disclose and providing personal information on the Internet (Hoffman, et
al., 1999). Therefore, if taxpayers perceive electronic tax-filing as extremely risky or
unsafe, it is very likely that they will not file their income tax return electronically.
Finding from this study supported H5 ( = -0.15) and is to conclude that perceived
risk have a negative effect on behavioral intention to use the electronic tax-filing
system.

Electronic tax-filing is a type of e-service between government agency and

taxpayers. Therefore their perceived risks associated with electronic tax-filing are a
major concern of taxpayers when using this new technology because their transactions
are primarily through virtual channel without face-to-face contact. Taxpayers are
concerned that their personal tax information will transmit to third parties without
their knowledge or permission. Thus, the taxpayers confidence of using electronic
tax-filing system to fill their tax return will be low. Therefore taxpayers may hesitate
to use the system if they are not confident on the systems security.

In this present study perceived risk showed a beta value of -0.15 which is negatively
significant at 0.01 levels. This finding is congruent with the e-commerce literature
(Pavlou, 2003; Featherman and Pavlou, 2003; Horst et al., 2007). In Pavlou (2003), it
44

is expected that perceived risk would lower consumers intentions to use Internet sites
for transactions. This path found to be significant because consumers are not likely to
engage in online transaction with a Web retailer thought to be opportunistic.
Consumers fear that the Web retailer has not taken adequate steps to reduce
infrastructure-related risks will also negatively affect transaction intentions. This is
similar to electronic tax-filing. Taxpayers will be discouraged from using the
electronic tax-filing system if LHDNM did not take appropriate measure to reduce
taxpayers negative beliefs of using the electronic tax-filing system.

5.1.2

Prediction of perceived ease of use on perceived usefulness

Previous research has showed that there is a positive relationship between perceived
ease of use and perceived usefulness with the acceptance of information technology
(Venkatesh and Davis, 2000). This finding has been validated in Internet technology
use (Moon and Kim, 2001). Davis et al., (1989) showed that perceived ease of use is a
determinant of perceived usefulness. This relationship is interpreted by stating that, a
system that is easier to use, will be perceived as more useful. In this present study, the
findings showed a strong effect of perceived ease of use on perceived usefulness ( =
0.81). It can be concluded that taxpayers perceived the electronic tax-filing system is
easy to learn and easy to use which taxpayers perceive they will become more skillful
to prepare their tax return through electronic tax-filing system. With the combinations
of ease to use factors, taxpayers perceived their performance, productivity and
effectiveness in filing their tax return through electronic tax-filing system have
improved. Therefore taxpayers perceived the electronic tax-filing system as a useful
system when preparing for income tax filing.
45

5.1.3

Prediction of perceived ease of use on perceived risk

Perceived ease of use of an information system is an important predictor of

information system adoption (Davis, 1989; Chau, 1996; Venkatesh and Davis, 1996;
Venkatesh and Davis, 2000; Venkatesh, 2000). Ease of use is defined as the degree
to which a person believes that using a particular system would be free of effort
(Davis, 1989; p. 320). E-service ease of use should express service reliability and
responsiveness. In addition, the system reduces users concerns of the performance
efficiency and perceived risk of e-service usage. E-service that is easy to learn and use
should be well understood by users and therefore seem less uncertain of the outcome.
The outcome of uncertainty of service usage is measured by perceived risk. Hence,
ease of use may act as a risk-reducing factor (Featherman and Pavlou, 2003). H3
hypothesizes that perceived ease of use will have a negative effect on perceived risk.
However, the findings from this study found that this hypothesis was not true. There
was a negative relationship between perceived ease of use and perceived risk but this
relationship was not significant.

This result is different from the results of the e-commerce literature (Featherman and
Pavlou, 2003; Lu et al., 2005). In Lu et al., (2005), the relationship between perceived
ease of use and perceived risk tested with no relationship at all. In Featherman and
Pavlou (2003), the relationship between perceived risk and perceived ease of use is
tested to be negatively correlated.

46

However, upon closer examination, this finding is somewhat similar to Featherman

and Pavlou (2003) than to Lu et al. (2005). One possible explanation to this is due to
the level of riskiness of a transaction. The e-billpay service, which was observed by
Featherman and Pavlou, involved a higher risk for users than the antivirus software
transaction, which was observed in Lu et al. (2005). Either for e-billpay service or
antivirus software users, all users need to furnish their personal information
electronically. For e-billpay service users, they need to furnish their credit card
information in order to fulfill the purposes of using e-billpay service. The risk concern
here is that third parties might intimidate the transaction process and use the credit
card information without their knowledge. Therefore, e-billpay service user will
perceive system that is easy to use will lower their level of riskiness. On the other
hand, for antivirus software user, ease of use of the software has no relationship with
level of risk. This explained why users still adopt antivirus software although most of
them understand that antivirus software cannot defend their computer completely
from virus attack.

Thus, in this electronic tax-filing study, the level of riskiness could possibly fall
between these two transactions. In electronic tax-filing, the amount of confidential
information required is not as much as in e-billpay service. In electronic tax-filing,
providing bank information is an optional item. Without providing the information,
taxpayers still can file their tax return successfully. However, if we compare to
antivirus software study, the required confidential information in electronic tax-filing
study is even more.

47

Another factor that might influence the non-significant path is the sample background
used in the study. The sample in this study consists of the actual taxpayers who have
personally experienced filing their tax return either manual or electronic way. As
compare to the general population, the sample population of university students was
used in Featherman and Pavlou (2003). They are younger, more computer literate and
more comfortable with Internet-based transactions. This analysis does suggest
however that the ease of use of electronic tax-filing system does exhibits risk reducing
effect on taxpayers.

5.1.4

Prediction of perceived risk on perceived usefulness

Perceived risk can be defined as the potential for loss in the pursuit of a desired
outcome of using e-services (Featherman and Pavlou, 2003, pp. 454). Perceived risk
has been shown to inhibit services adoption (Featherman and Pavlou, 2003). The
increase feeling of discomfort and anxiety caused by an increased risk perceptions
would cause the potential adopter to devalue perceived usefulness of the e-services. In
this present study, the result showed perceived risk was significantly and negatively
effect perceived usefulness with a beta value of -0.32. With respect to perception of
risk of the electronic tax-filing system, taxpayers who perceive the reliability and
security of the system to be low will be less likely to adopt the system. To decrease
perception of risk, LHDNM can reassure taxpayers of the reliability of the system by
including easily visible privacy statements on their sites. If taxpayers have a positive
experience with the system, they will be more likely to use the service again. In
addition, they will possibly share this positive experience with others, thereby
encouraging adoption.
48

5.1.5

Conclusion

This present studys primary goal was to examine taxpayers perception toward the
electronic tax-filing system which will influence their behavioral intention to adopt
the system. Thus, this study integrates constructs from the Technology Acceptance
Model (perceived usefulness and perceived ease of use) with the new construct
perceived risk. The results indicated that perceived ease of use, perceived usefulness
and perceived risk are significant indicators of taxpayers intention to adopt the
electronic tax-filing system. Since there are no prior studies on Malaysian electronic
tax-filing system, this research offers an understanding of the relationship among the
three constructs in e-government services. Another objective of this paper was to
provide LHDNM with a preliminary reference to study the roles of perceived ease of
use, perceived usefulness and perceived risk to its electronic tax-filing system. Ease of
use, usefulness and risk are integral concepts of electronic tax-filing adoption. With
the knowledge of the factors that significantly influence taxpayers adopting
electronic tax-filing system from this study, this will also enable LHDNM to develop
online services that will meet the needs of their taxpayers.

5.2

Suggestions for Future Research

As with any research, this study has several recommendations for future research. As
mentioned in chapter 1 under limitation of study, the unexplained 39 percent of
variance suggests that the research model may have excluded other possible
constructs that might influence the adoption of electronic tax-filing system.

49

First recommendation for future research is to expand the sample in this study to
taxpayers from rural area. Generally, taxpayers from rural area are less educated or
possess reduced computing skills. Therefore, they will perceived higher risk of
adopting electronic tax-filing system.

Second recommendation for future research is to study the background of manual

taxpayers and electronic taxpayers. Background study of the taxpayers can be in the
area of their education level, age, years of computer and Internet experience and
availability of information system resources, be it at home or at work. Study
conducted by Fu, et al., 2006 on taxpayer intentions to accept electronic tax filing in
Taiwan context, the finding indicated that taxpayers who choose manual filing
method are from the background of lower education, older, had less computer and
Internet experience and had less information system resources.

Electronic tax-filing system encompasses the use of Internet technology and the
Worldwide Web. In order to evolve from paper based operations to computer based
operations, LHDNM should pay attention to taxpayers technology acceptance and
search for ways to encourage taxpayers adoption of e-government services. In order
to study taxpayers intention to adopt electronic tax-filing system, taxpayers
technology readiness could be one of the possible factors that will influence adoption.
Therefore the third recommendation for future research is to study the level of
technology readiness of Malaysian taxpayers. Previous study (Lai et al., 2004) found
that there is a relationship between technology readiness and tax practitioners usage
intention towards the electronic tax-filing system. The findings also identify that

50

technology readiness is a force behind the motivation to adopt the electronic tax-filing
system.

Electronic tax-filing can be done in a number of methods. It can be done through the
Internet, through their tax agent and through the LHDNM centres. As a fourth
recommendation for future research, it is very important to examine which methods
are adopted by taxpayers for future research. If the filing is done through their tax
agent, then tax agent will have a role in terms of educating their clients because tax
agents are an important intermediary between the LHDNM and the taxpayers.
Therefore, tax agents must be provided with the facility for filing the tax returns of
their clients in a seamless and efficient manner.

This study shows that perceived risk is significantly and negatively effect on
behavioral intention and it is an important factor in electronic tax-filing adoption. As
presented in this paper, there are many types of risks and only two out of seven types
of risk being adopted from Featherman and Pavlou (2003) research on predicting eservice adoption. For example, Featherman and Pavlou examined a multifaceted
model of perceived risk and theorized the relationship between the multidimensional
construct of risk with other variables (Featherman and Pavlou, 2003). Therefore, the
examination of more detailed facets of perceived risk (nature and role of risk) would
be a promising area for future research.

The element of trust has been found to influence user intentions to adopt e-commerce
(Gefen, et al., 2003; Pavlou and Fygenson, 2006) and the key element of trust is risk.
Trust has been identified as an essential element of relationship when uncertainty or
51

risk is present (Pavlou, 2003; Siau and Shen, 2003; Warkentin et al., 2002). Trust and
risk perception are very strongly interrelated. Research shows that trust reduces risk
perceptions in the relationship between risk and intention (Salam et al., 2003). It also
suggests that in the e-service adoption literature (Pavlou, 2003) perceived risk
mediates the effect of trust on intention. Furthermore, the level of perceived risk will
decrease when individual have trust on people who are also involved in the
transaction (Featherman and Pavlou, 2003). Since researchers are beginning to
empirically explore the role of trust in e-government adoption (Belanger and Carter,
2008; Horst et al., 2007; Carter and Belanger, 2005; Warkentin et al., 2002), future
research with the additional trust construct will expand the explanatory power of this
study model.

5.3

Implications

The findings of this study have significant implications in the perspective of research
on determinants of taxpayers behavioral intention to adopt electronic tax-filing
system. The study provides further evidence on the appropriateness of using the TAM
to determine the different perception on behavioral intention to adopt electronic taxfiling system. As predicted from the previous TAM research, the two behavioral
beliefs, perceived ease of use and perceived usefulness, well explain the adoption of
electronic tax-filing system. In addition, the results from the study have shown that
perceived risk construct have facilitated to a better understanding of electronic taxfiling system adoption. Thus, the power of the TAM will be greatly enhanced by
taking into account the impact of the perceived risk. In conclusion, this study has
significant contributions to TAM by providing empirical evidence that perceived ease
52

of use, perceived usefulness and perceived risk are important factors that influence the
taxpayers adoption of the electronic tax-filing system.

This study also provided some preliminary evidence about the criteria that taxpayers
used to evaluate their adoption of electronic tax-filing system. Given the fact that the
usage of electronic tax-filing system is completely voluntary and taxpayers are from
diversified background, the findings from this study suggest that in order to attract
more taxpayers to use electronic tax-filing system LHDNM must develop a useful,
easy to use and risk free system.

As the higher levels of perceived risk will decrease the behavioral intention to adopt
the system, this may represent the smallest opportunity for growth in electronic taxfiling system adoption. LHDNM should make an effort to reach this group of
suspicious taxpayers to realize the greatest return on using the system. LHDNM could
provide incentives to encourage taxpayers to try this electronic tax-filing system.
Perhaps LHDNM could guarantee online processing would be faster than manual
transactions and is risk free. LHDNM could also use pamphlets and posters at their
brick-and-mortar locations to emphasize the security and privacy mechanisms
employed to ensure reliable services. Once taxpayers have s successful experience
with this service they will begin to develop trust in the system and may increase the
willingness to use electronic tax-filing system in the future.

LHDNM also needs to communicate their ability and desire to provide taxpayers with
convenient, dependable service via a plethora of channels, including the Internet.
Stories of e-services that are successful and statistics of taxpayers who are pleased
53

with the service should be publiced. Such publicity would positively impact
taxpayers perceptions of the competence of LHDNM and as well will help to
increase non-adopters perceptions of LHDNM trustworthiness. This has two effects,
increasing their intention to use electronic tax-filing system, and decreasing their
perceptions of risk affiliated with adopting this system.

By understanding these three constructs, it has given LHDNM the extended

knowledge of taxpayers decision making and lead to better targeting strategies, such
as employing training and promotion approaches to develop taxpayers beliefs of
usefulness, ease of use and risk free system. Having training and promotion, it can
influence taxpayers behavioral intention to adopt electronic tax-filing system. This
could be valuable for LHDNM in designing and implementing their e-government
services.

The advantages from taxpayers adoption the system not only give impact to the
taxpayers but also to LHDNM. LHDNM will benefit from the elimination of manual
entry errors by taxpayers, requiring less computation error, less notices adjustment
and reduces processing time and costs. Most important for taxpayers is that the
process of refund for any excess of payment from LHDNM will be faster.

While LHDNM have made progress in their capabilities to offer online tax services to
taxpayers, more research from the perspective of taxpayers is required to facilitate
their adoption. As technology continues to become established in society, the
importance of taxpayers perception on the accuracy and reliability of e-services will
also increase. If LHDNM expect taxpayers to provide sensitive information and
54

complete personal transactions online, then LHDNM must acknowledge and enhance
taxpayers views concerning the credibility of electronic tax-filing services.
Nonetheless this study only provides a starting point for LHDNM seeking ways to
improve taxpayers acceptance of electronic tax-filing services. On the other hand,
LHDNM must not be complacent and should continuously review and reassess the
existing processes because changing behavior is a continuous process and a true
challenge.

55

APPENDIX I

A Study of Taxpayers Perception of Adopting a Personal Tax e-Filing

System
Dear Sir/Madam,
The general purpose of this study is to examine the effect of taxpayers perception on the eFiling system that will influence taxpayers usage intention.
This questionnaire will only take 10 minutes to complete. In view of this, please answer the
following questions sincerely and honestly. Please be assured that your response will be
treated with the strictest confidence.
This survey is conducted by Ms. Ng Lee Bee, a Master of Management student at University of
Malaya who is under my supervision. This survey is conducted as part of a research project,
which shall be submitted in partial fulfillment of the requirements for the Degree of Master in
Management from the University of Malaya.
Thank you for your time and cooperation towards making this survey a success. Please return
the survey before 31st December 2007.
Yours sincerely,

Anna A. Che Azmi, PhD

Faculty of Business and Accountancy
University of Malaya

56

A STUDY OF TAXPAYERS PERCEPTION OF ADOPTING A PERSONAL

TAX E-FILING SYSTEM
The Inland Revenue Board (IRB) has launched the e-Filing system in year 2006 for
individuals, income earners or those working under their employers and sole
proprietorships to file their year 2005 returns. This questionnaire was designed to
study the taxpayers perception of adopting the new system and has three sections.
For any queries, please contact Ms. Ng Lee Bee at her mobile number 012-6663099
or via her email ngleebee@yahoo.com.
Section A - The following are some statements about your perception and your
usage intention towards tax e-Filing system. Please fill in the box according to the
scale given below with an x. (How to mark the x? Place the cursor at the box and
double click. The check box form field option will appear and tick at the checked
under default value.)
Strongly Disagree
PEOU1

Learning to use e-Filing

system would be easy for me.
PEOU2 I would find it easy to prepare
income tax filing using eFiling system.
PEOU3 It would be easy for me to
become skillful at using eFiling system.
PEOU4 I would find e-Filing system
easy to use.
PU1
Using e-Filing system would
improve my performance in
preparing income tax filing.
PU2
Using e-Filing system would
improve my productivity in
preparing income tax filing.
PU3
Using e-Filing system would
enhance my effectiveness in
preparing income tax filing.
PU4
I would find e-Filing system
useful in preparing income tax
filing.
BI1
Assuming that I have access to
the electronic tax-filing system,
I intend to use it.
BI2
I intend to increase my use of
the electronic tax-filing system
in the future.

Strongly Agree

57

Section B - The following are some statements on your perception of risk of using
electronic tax-filing system. Please fill in the box according to the scale given below
with an x.
Strongly Disagree
PR1

PR2

PR3

PR4

PR5

PR6

Chances of using e-Filing system

will cause me to lose control
over the privacy of my personal
information.
By using e-Filing system my
personal information would be
use without my knowledge.
Internet hacker might take
control
of
my
personal
information if I use e-Filing
system.
The security system built into
the e-Filing system is not strong
enough to protect my account.
Considering the expected level
of service performance of the eFiling system, using it will be
risky.
E-Filing system server may not
perform well and process data
transmission incorrectly.

Strongly Agree

58

Section C Background of Respondent

Your personal data are needed to enable a meaningful interpretations and comparisons
of the results. Please be assured that the confidentiality of your data will be
maintained.
1)

Which method did you choose to file your income tax return this year?
Manual

2)

Which method did you choose to file your income tax return last year?
Manual

3)

Internet

Did you personally file your own tax return?

Yes

5)

Internet

Which method you intend to choose to file your income tax return next year?
Manual

4)

Internet

No

Computer Experience (years).

None
1 3 years
4 6 years
7 9 years
10 years or above

6)

Internet Experience (years).

None
1 3 years
4 6 years
7 9 years
10 years or above

7)

Type of assessment form to file.

Form BE
Form B

8)

Type of income.
Self-employed income
Salaried based income
Business income

59

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