Self Assessment System in Africa

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Implementing self assessment system is a great adventure to the Malaysian tax administrator especially at the early stage. Tax knowledge is one of the most essential part so that the taxpayers will be anabled to assess their tax payable at their own. Accordingto the findings, we can conclude that tax knowledge is a major factor in determining the accuracy of the tax return. Hence, through self assessment system, the individual has also being required to calculate the amount of tax payable correctly because the IRB will minimize the number of tax return audited compared with the Formal System. On the other hand, compliance costs have often been described as the 'hidden costs of taxation'. They can be described as the private sector costs of complying with a tax system, over and above the actual amount of tax liability, Furthermore, these costs do not include the public sector administrative costs which are borne by the government. With the introduction of SAS, it is anticipated that a large proportion of taxpayers, particularly the business community, would not complete their own returns, but get a tax agent or tax adviser to complete them. Therefore, their compliance costs are expected to rise. For a tax system to be efficient, its administrative and compliance cost should not be excessive. It should not unduly interfere with economic incentives to work, save and invest and it should be consistent with macro-economic policy (James, 1996). According to Sandford (1994), there is no reliable evidence to suggest that self assessment increases evasion but there is a great deal of evidence to suggest that countries with self assessment have higher compliance costs. Compared to tax laws in the UK and Australia, the tax legislation in Malaysia is much less complicated. It is, also reassuring to note that the IRB is currently devising a simple tax return form so that the 1.9 million Malaysian individual
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