A Review On Electronic Filing Systems Information Technology Essay

Chapter 2

Literature Review

2.1 Introduction

Inland Revenue Board of Malaysia (IRB) or Lembaga Hasil Dalam Negeri (LHDN) is the main revenue collecting agencies under the Ministry of Finance in Malaysia. IRB was established in consistent with the Inland Revenue Board of Malaysia Act 1995 to provide a more autonomy services especially in financial and personnel management to improve the quality and effectiveness of tax administration. IRB is responsible in overall administration of direct taxes. IRB is act as an agent between government and citizens to provide services in administering, assessing, collecting and enforcing payment of tax (Computer Associates International, Inc, 2005).

Since 2006, IRB has moved a step forward on its effort to develop and modernize its services to taxpayers by providing E-Filing System. E-Filing is one of e-government initiatives in Malaysia and it will be a cornerstone of the IRB to move away from the traditional paper-based return filing.

2.2 Worldwide Experience of E-filing Issues in Brief

Based on the survey conducted by H.D. Vest Financial Services, Inc, – a US largest provider of financial products and services delivered through tax professionals in 2000, shown that majority of Americans are likely to adopt e-filing system. The acceptance of e-filing system has given rise due to an increased quality of website tax preparation. According to the report, there are over half of the citizens says that they are very comfortable with filing their tax by electronic. Fifty-four percent of American taxpayers (65 million) say that they are comfortable with e-filing system, which is more than twice the number that actually e-filed their tax returns in the previous year (30 million). More importantly, the survey also pointed out the same level of comfort in receiving their refunds electronically.

Also, in Asia, Taiwan is example of country which launched e-government services where the country’s citizens have been adopt e-filing system as their income tax filing method. However, there is a significant difference in willingness between men and women e-filers due to its usefulness, cost saving, and the ease of use (Jen et al, 2006). Besides that, there are numerous of researches have reported this issue and found several factors such as technology readiness of the people, perception of the public in terms of technology usefulness, ease of use, and security of their information provided online (James, 1987; Davis, 1989; Parasuraman, 2000; Parasuraman and Colby, 2001; and Yurcik and Sharma, 2004) which would affect the intention of taxpayers to adopt e-filing to their tax filing method.

2.3 Tax Filing Methods in Malaysia

Starting in 2006, Malaysian citizens are able to choose from two methods of tax-filing: manual and Internet based or e-filing.

2.3.1 Traditional Paper Based System

Manual filing is the traditional and still the most popular method of filing individual tax returns in Malaysia. Taxpayers usually perform complex calculations by using mental arithmetic or calculator and then 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 to the counter in person 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. After receiving a return, the agency’s staffs need to input the data by uses a data entry. This manual method of filing is tedious work for the tax collection department because they have to enter the taxpayer’s data into their computer system quickly and accurately. Besides that, this process is cumbersome, time-consuming, and paper-intensive for both taxpayers and the tax agency because error checking on paper is fault-intensive and was traditionally done by the tax agency staff.

2.3.2 Electronic Filing

Over recent years, with the liberalization and globalization, fast delivery service is required a faster mechanism of transaction between government and its people. Internet has been used as a platform in almost all aspects of human living by government to provide services to citizens. This is called e-government. In 2006, the IRB or LHDN launched the electronic tax-filing system to improve the efficiency in assessing and collecting tax information while reduce cost. Electronic tax-filing system is one of the digital services offered by the Malaysian Government and is an important service to citizens since it is highly related to the tax filing of citizens every year. In the Asia-Pacific region, Malaysia and Japan were the 2 countries with lowest number of users making transactions using government online with just 12% and 13% respectively in 2002. Singapore leads the region with 53% although Australia has seen the most significant increase in online government service usage from 31% to 46%. (The Star, Nov 12, 2002).

Electronic tax-filing starts for trial and experimental use in year 2006 and is coming into its fourth-year of implementation in 2010. This provided a way for taxpayers to 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. In 2006, 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 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 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.

2.4 Benefits of E-filing System

E-filing system is an important services that provided by government to citizens in order can improve the efficiency in the operational and processing tasks involving tax-filing returns. It can improve the tax-filing performance while at the same time save the costs of taxpayers and tax collection agencies. Firstly, E-filing system can avoid the problem of delay in collections of income tax and subsequently process the tax files expeditiously. In addition, the number of taxpayers is increasingly, there is a need for additional manpower and time to manage the tax returns if the data has to enter into database manually. Therefore, implementation of e-filing system would significantly improve the efficiency of the tax filing process, improve the accuracy of the tax returns and reduce transcribing error that happened by manual base system. Moreover, E-filing system can overcome the difficulties in calculations which taxpayers faced when using paper base system. As a result, implementation of e-filing system is provided a greater convenience for taxpayers by allowed them to file their tax returns at anytime and from anywhere within the stipulated tax filing period. Lastly, cost savings is another benefit of using e-filing system. According to Forrester Research (2001), savings has identified fall in the following three categories. First, automated data entry yields great savings. By using e-filing system, government clerks need not re-input the tax information due to taxpayer has entered and sent electronically to the agency. It will increase the productivity of data entry and checking and then will reduce the labor costs for data handling personnel. Second, it would reduce the errors in calculations, lighten the verification and correction burden. Lastly, electronic data exchange would be reduces printing and mailing costs because tax departments need to spend considerable amount of money to subcontract printing and mailing of tax forms if using manual base system.

2.5 Barriers of E-filing System

In 2006, only more than 120,000 out of 4 million individual taxpayers decided to use e-filing, which represented only 3% of the total individual taxpayers (The Star, 2006a). It is because taxpayers are not familiar with the e-filing technology and perceived risk of e-filing (Fatimah and Lai, 2008; Lai, 2006a). Also, lack of internet self-efficacy and skills are potential barriers for taxpayers in Malaysia in adoption of e-filing system (The Star, 2006b). The basic barrier that has stopped taxpayers from using e-Filing was they need to queue at the Lembaga Hasil office to get the 16 digit pin number. This process is still very much manual. Besides that, not having step by step explanation on how to use e-Filing also was another reason. Lastly, the privacy of the website also was one of the concerns of taxpayers in adoption of e-filing.

Overall, the barrier of implementation of e-filing system is about the digital divide of the citizens, to create trust of citizen in using e-filing system due to citizens basically fear of their privacy of their personal information and also their capability to use the electronic services. Thus, the barriers to the implementation of electronic government have to improve so that the citizen of the country will able to use the services. The government has to make sure that the electronic services will give convenience to the citizen to use and also to ensure ease of use the services. By ensuring convenience and ease of use of the services will make the users more likely to adopt e-filing system.

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2.6 Adoption of E-filing System

According to Bible Dictionary (1897), adoption is defined as an act to take and follow a course of action, for example by choice or assent. It also defined that adoption is an act of to vote to accept. User acceptance was defined by Swanson (1988) to be a ”potential user’s predisposition toward personally using a specific system.” According to Fishbein and Ajzen (1975), user adoption is determined by his behavioral intention. Behavior intention is a measure of the strength of one’s intention to perform a specified behavior. It is a kind of “self prediction” or “behavioral expectation”, indicated as one of the most accurate predictors available for an individual’s future behavior (Davis, 1989). According to researchers of consumer behavior, consumer intention is regarding repeated purchase (Patterson, 1997). Thus, the factors that affect taxpayers’ behavior towards e-filing have to examine in order to given rise to an increased comfort with website tax preparation and increase the number of taxpayers on using e-filing.

However, e-filing system still remained unnoticed by the public and underused due to their availability. Based on data, IRB department has to handle around 10 million employed citizens’ tax returns a year. The Star May 1, 2006 states that 120,000 tax returns have been filing their tax through e-Filing in 2006, represents about 1.2% of the population of the taxpayers. In 2010, IRB tax operation division deputy director-general Datuk Dr Mohd Shukor Mahfar said that as at April 30, IRB had received 677,885 income tax return forms manually from individual tax payers. While the number of taxpayers who submitted their income tax returns via e-filing had increased to over 1.48 million as at April 30, 2010 compared to over 1.25 million taxpayers in 2009. (The Star May 18, 2010) However, the number of tax-payers who submitted their income tax returns via e-filing is still low in Malaysia. The government intends to have e-filing system is because they want to reengineer the process, simplify, speed up the process and error free but tax payers still lack of willingness to adopt the system. The perception of tax payers towards electronic tax filing start with the technology acceptance which is very important to the tax payers. If the tax payers do not accept technology then they will definitely do not want to use the system at all. The individual’s intentions to use technology in using the system is determined by perceive ease of use. It is means that, they expect the system is easy to use. If the taxpayers feel difficult to use the system, they will probably not using the available system. Positive attitude of the tax payer towards tax system will make the tax payer more willing to use electronic tax filing and improve their perception towards e-Filing systems. According to France Belanger and Janine S.Hiller (2006), the intention and willingness of the users to use electronic government is also important in ensure electronic filing system is fully implemented.

Therefore, there is a need to understand the acceptance by the users of the electronic tax-filing systems and identify the factors that can affect their decision to use or not use the electronic tax-filing systems. This issue is important in that the answer could help the government to plan and promote new forms of electronic tax-filing systems in the future.

2.7 Theoretical Background and Research Model

Technology acceptance is important. Technology acceptance is an individual’s psychological state with regard to his or her voluntary, intended use of a technology (U.E. Gattiker,1990). A fundamental intention-based theory is the Theory of Reasoned Action (TRA) (M. Fishbein, I. Ajzen.,1975) According to this, external stimuli influence a person’s attitude toward a behavior indirectly by influencing his or her beliefs about the consequences of performing the behavior. Adapted from this, both the technology acceptance model (TAM) and the theory of planned behavior (TPB) are well established and appear to be widely accepted (K. Mathieson,1991, C.K. Riemenschneider, D.A. Harrison, P.P. Mykytyn,2003 S. Taylor, P.A. Todd,1995).

2.7.1 Technology Acceptance Model

This research is basically form by the Technology acceptance model which developed by (Davis,1989). It is important to understand the key TAM constructs, perceive ease of use and usefulness when examine the technology acceptance. Technology Acceptance Model (TAM) is tailored for IS contexts, and was designed to predict information technology acceptance and usage on the job (Venkatesh, Morris, Davis & Davis, 2003). TAM model found out two particular beliefs which are perceived usefulness and perceived ease of use.

Figure 2.1: Technology Acceptance Model

2.7.2 Theory of Planned Behavior (TPB)

TPB conducted by subjective norms (SN) and perceived behaviors control (PBC) as main determinants of Behaviour Intention. Together with TAM, TPB was chosen to provide a necessary theoretical framework for this research. TPB incorporates by Behaviour Intention, Subjective Norms and Perceived Behavioural Control.

Source: Armitage & Christian. 2004.

Figure 2.2: The Theory of Planned Behavior Perceived Behavioral Control

The PBC construct refers to an individual’s perceptions of the presence or absence of resources or opportunities necessary for performing an action. It is conducted by individual self-efficacy (Bandura,1977) and facilitating conditions(Triandis, 1077).

Figure 2.3: Perceived Behaviour Control

2.8 Theoretical Framework which Modified from TAM and TPB model

In this research, the combination of TAM and TPB model is used as the research model. From TAM model, two variables are included in the model are Perceived Usefulness and Perceived Usefulness. Based on TPB model discussed at above, subjective norm and perceived behavior control are included in behavior intention towards particular technology. Perceived behavior intention included three variables which are self efficacy, technology facilitating and resources facilitating. In this research, technology facilitating and resources facilitating would be combined as facilitating condition. Beside TAM and TPB model, there are two more variables from previous research stated that the variables would have a significant impact on behavior intention which are perceived risk and personal innovativeness. From the previous research, Risk perceptions (Fu et al., 2006) and personal innovativeness (Agarwal and Prasad, 1998) have a significant impact on behaviour intentions. Therefore, risk perceived and personal innovativeness would be included in this research model. The research model in this research is shown in Figure 2.4.

Figure 2.4 The Model modified from TAM and TPB model

This study will focus on several factors such as perceived usefulness, perceived ease of use, perceived risk, personal innovativeness, self efficacy, facilitating condition and subjective norms on behavior intentions to use e-filing which consequently effect the adoption of e-filing system. As discussed at above about the benefits of e-filing system, one will be tempted to believe that taxpayers would try out to use e-filing system. It is noted that taxpayers decide whether to use e-filing as their tax filing method is based on the listed factors.

2.9 Factors affecting Behaviour Intention towards Adoption of E-filing System

2.9.1 Perceive Ease of Use

Perceived 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). In Davis (1989), perceived ease of use which test to had a smaller but significant affect that subsided over time. According to Chang (2005), perceived ease of use also found to have a significant impact on attitude, thus affects behavior intentions.

This highlights the necessity for an e-file system to be easy to use in order to accommodate individuals that are not considered to be as computer savvy. According to Suha AlAwadhi (2009), the overall perception of the participants was that online services are easy to learn and use, especially when support is provided. These perceptions were formed as a result of the participants’ ability to use the Internet, confirming results of previous research that effort expectancy is significantly related to participants’ behavioral intention. According to Thong, 2004, the easier it is for a user to interact with a system, the more likely he or she will find it useful. Acceptance and usage of the e-filing system is concerned with simplicity of the site itself. If the system matches the users’ mental model and users can find it somehow intuitive with nothing strange or unlikely happening, then they would feel more confident about the e-filing tax site. Thus the ease of use and users’ feeling of control of the e-filing tax system would give them confidence about the new technology system and then affects their behavior intention in using e-filing.

Regarding to Teo et al (1999), information systems that users perceive easier to use and less complex will increase the likelihood of its adoption and usage. An application perceived to be easier to use than another is more likely to be accepted by users. Perceived ease of use positively influenced behavior intention. Past research by Hong et al.,(2001), Gefen et al.,(2003), Heijden (2003), Venkatesh et al.,(2003) and Heijden (2003) also found perceived ease of use to influence behavior intention. Vast research have provided evidence of the significant effect of perceived ease of use on intention (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).

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H1: Perceived ease of use (PEOU) will have a positive effect on behavioral intention (BI) to use the electronic tax-filing system.

2.9.2 Perceived of Usefulness

Perceived usefulness is defined as the degree of taxpayers’ believes from using internet tax-filing system that would enhance their job performance and the measurement (Davis, 1989). In other words, perceived usefulness is a prospective user’s subjective probability that using certain electronic application system will increase his or her performance within an organizational context (Davis, 1989). According to Davis (1989), acceptance of technology is a direct function of behavioral intention of the users, which in turn a function of attitude toward actual usage by the users. In other words, it will reflect feelings of favourableness or unfavourableness toward using any particular technology. The perceived usefulness will reflect the belief that using the technology will enhance performance.

According to Fu et al., (2006) which observed on taxpayers intention to adopt a particular tax filing method, the finding shows behavioral intention was largely driven by perceived usefulness. Wang (2002) study of electronic tax-filing in Taiwan, the findings found that perceived usefulness was a stronger predictor of people’s intention to e-file. Besides that, there are a numerous empirical studies have already certified that there is 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). Perceived usefulness of the system will intimidate users’ intention to use an information system (Davis, et al., 1989). However, Chang et al.(2005) study has found that perceived usefulness has no direct impact on behavior intention but has significant on attitude, which consequently has an impact on behavior intention of using the system.

According to Lemuria D. Carter, Megan E. McBride, Ludwig Christian Schaupp, (2009), citizens who believe an electronic option will help them file their taxes more quickly and efficiently than traditional alternatives are more likely to adopt e-file systems. In research of Lai, Ming-Ling Ling (2005), respondents perceived using an e-filing system would save costs and time in the long run as well as facilitate tax compliance. In other word, tax practitioners are likely to accept a technology that can enhance their job performance in providing tax service to clients. According to Suha AlAwadhi (2009), users favored e-government services over traditional services because of convenience of access, savings in time, money and effort, and the efficiency of service delivery. Such services would prevent them from encountering stressful situations, such as waiting in long queues, and dealing with uncooperative employees. Peter Genuardi (2004) found that participants indicated overwhelmingly that online tools would strengthen their ability to perform their job responsibilities related to tax preparation assistance.

Nysveen, Pedersen, & Thornbjomsen (2005) found that acceptance and usage of the e-filing system is concerned with the usefulness of the system itself and the benefits received from the system. If the system would improve taxpayers’ performance and the speed of tax filing work, taxpayers would feel more likely to adopt the e-filing system. In other words, a sense that the advantages of the e-filing system are outweighed the disadvantages, taxpayers’ will have intention to continuing using it. Thus the usefulness of the e-filing system would give taxpayers confidence about the new technology system and then intend to adopt it.

H2: Perceived usefulness (PU) will have a positive effect on behavior intention (BI) to use the electronic tax-filing system.

2.9.3 Perceived Risk

According to the literature, risk perceptions have a significant impact on behaviour intentions (Fu et al., 2006). Perceived risk is defined as the citizen’s belief that he will incur a loss while pursuing a given outcome (Warkentin and Gefen, 2002). A common and widely recognized obstacle to electronic commerce adoption has been the lack of security and privacy over the internet (Bhimani, 1996; Cockburn & Wilson, 1996; Quein & Klein, 1996).

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. Besides that, security violations in Internet-based systems have received much notoriety in the popular sections of press and mind of the people all over the world. It is this perception of security in the online transactions that causes majority of the taxpayer population to be reluctant to use this alternative medium of filing their tax returns. People may perceive that current facilities in electronic tax filing website are not adequately secure and/or helpful. This may also lead to a general belief that electronic transactions are inherently insecure and that any hacker can break into the computer system and can steal and/or misuse their confidential personal data information. Thus, taxpayers may hesitate to file their tax return electronically if they perceive a lack of security in the process.

Fear of a lack of security is one of the factors that have been identified in most studies as affecting the growth and development of information systems. There is a significant number of studies have found that perceived risk significantly affects the behavioural intention of current and potential users of the e-services (Hsu and Chiu, 2004; Fu et al., 2006; Gallant et al, 2007; Carter et al, 2008). Tan (1999) found that information technology-related form of transaction activities is similarly perceived as higher risk or loss by consumers, and suggested that risk-averse consumers are less likely to do transaction on the Internet. Thus, users’ perception of the extent to which electronic tax-filing systems are able to ensure that transactions are conducted without any breach of security is an important consideration that might affect the use of the electronic tax-filing systems.

Nelson (1997) also added that user trusts in web-based technologies are affected by such issues in networks security, confidentiality, reliability of information, and jurisdiction. Thus citizen must have confident in both the government and the technologies (Carter and Belanger, 2005). Prior research has shown that consumers will have hesitation with transacting with an Internet vendor because of uncertainty or the perceived risk of having their personal information stolen (McKnight et al., 2002). Trust is vital in allowing citizens to feel comfortable sharing their income tax information. According to Suha AlAwadhi (2009), many participants thought that if e-government services were not secure enough; their personal data would be under threat and could be altered or misused by hackers.

According to Pavlou, 2003, perceived risk will reduces users’ intentions to exchange information and complete ecommerce transactions. Frambach (1993) found that the speed of adoption is negatively related to the level of perceived risk. The perceived risk surrounding and innovation might cause a potential adopter to postpone the decision to adopt or reject the innovation. In Lai et al. (2004) study, some of the respondents specifically expressed that they would only use the e-Filing system if the IRB could assure them that the e-Filing system were safe and secure, and if the usability and reliability of the e-Filing system were fully tested and well documented. Users of e-filing might influenced by risks they perceive, whether or not such risk actually exists. Thus, their perception of e-filing will affect their speed of adopting the system. Therefore, perceived risk was included as one of the determinants of taxpayers’ adoption of e-filing in the present study.

H3: Perceived risk (PR) will have a negative effect on behavioral intention (BI) to use the electronic tax-filing system.

2.9.4 Personal Innovativeness

The role of personal innovativeness in individuals’ adoption of innovations has been acknowledged in innovation diffusion studies (Rogers, 1995) wherein early users of an innovation are considered “innovative.” Other researchers have reported that global innovativeness exhibits low-predictive power when it comes to the adoption of any specific innovation (Goldsmith and Hofacker, 1991; Leonard-Barton and Deschamps, 1988). Citing these and some other related research findings, Agarwal and Prasad (1998) conceptualized the construct personal innovativeness, which they define as “the willingness of an individual to try out any new information technology.” According to Agarwal and Prasad (1998), they found that there is moderating effect of personal innovativeness on the relationship between behavior intentions. In the meantime, empirical support has been found for a direct effect of personal innovativeness on behavior intentions (Thompson et al, 2006; Yi et al., 2006).

Acceptance and usage of the e-filing system is related with the taxpayers’ personal innovativeness toward the new information technologies. If the taxpayers like to experiment with new information technologies, they would more likely to adopt the e-filing tax. In other words, if taxpayers’ are like to keep up themselves with the technological advance, they would have more aggressive to try out a new information technologies and will look for ways to experiment it. Thus the self innovativeness of taxpayers would give taxpayers confidence about the new technology system and then intend to adopt it. These attributes may reflect an individual who is relatively more innovative and is also more willing to take risks in adopting a new product or innovation relatively earlier than others (Rogers and Shoemaker, 1971).

CAROLYN A. LIN,(2006) found that venturesomeness or willingness to take risk in adopting a new product. Indicated that an individual’s tendencies toward embracing new challenges, being curious, seeking new ideas, learning new skills, as well as keeping up with the new innovations, science progress, and computer technology.

H4: Personal innovativeness (PI) will have a positive effect on behavioral intention (BI) to use the electronic tax-filing system.

2.9.5 Self-Efficacy

One of the most powerful theories of human behavior is the social cognitive theory. Social cognitive theory (Bandura, 1986) states that self efficacy as a direct determinant of individual’s behavior. Self-efficacy is an individual’s self-confidence in his or her ability to perform a behavior (Bandura, 1982). Computer self-efficacy is defined as the judgment of one’s ability to use a computer. According to Chan & Lu (2004), individual with high computer self-efficacy are expected to be able to competently use different software packages and computer systems while those with low self efficacy would perceive their capabilities as limited to particular software package or computer systems. Chau, P. Y. K. (2001) has confirm the critical role that computer self-efficacy plays in understanding individual responses to information technology.

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An individual with a higher level of technology readiness has higher usage intention and more experience in using the technology based products and services. Similarly, prior studies by Dabholkar (1994); Mick and Fournier (1998) also demonstrated that people with more positive beliefs are more receptive and ready to use the various new technologies brought to them.

In a separate research, Yin and Hwang (2003) found that application of specific self efficacy was more powerful than behavioral intention in determining actual use of the system β=0.3 for application specific self efficacy, β=0.19 for behavior intention. This shows that users tend to adopt a system better when their own self-efficacy is higher. In a more related study on acceptance of electronic tax filing in Taiwan, (Fu, Fan & Chao, 2006) had used self efficacy as a determinant to behavior intention. Their study indicates the self efficacy has a direct relationship to behavior intention to use internet tax filing. Recent literature that showed computer self-efficacy has a positive effect on perceived ease of use and the final decision to use computer (Agarwal, Sambamurty & Stair, 2000; Venkatesh, 2000; Chan & Lu, 2004; Ramayah et al.,2004; Ramayah & Aafaqi, 2004; Ramayah et al., 2005; Hassan, 2006; Gopi, 2006).

Lemuria D. Carter, Megan E. McBride, Ludwig Christian Schaupp, 2009. e-file adoption requires a certain level of comfort computer technology. Those who are comfortable with technology and confident in their ability to use these systems effectively are more likely to adopt an e-file system. Previous research indicates that as the tax payer’ self-efficacy increases, they will find it easy to adopt and use e-Filing. (Agarwal, Sambamurty and Stair 2000, Venkatesh 2000, Chan and Lu 2004, Ramayah et al 2004, Ramayah and Aafaqi 2004, Ramayah et al 2005; Hassan 2006 and Gopi 2006).

Lee, Jungwoo,2004, It has been suggested that computer self-efficacy plays a significant role in an individual’s decision to use computers, as well as in the ease with which many of the skills associated with effective computer use are acquired. Thus, it is posited that when adoption decision makers are not confident with the technology (low computer self-efficacy), it is less likely to be adopted. The decision-makers lack enough confidence in their knowledge or skill to adequately evaluate the usefulness of the technology. Training could lead to increased self-efficacy which ultimately facilitates the diffusion and utilization of technology (Agarwal, Sambamurthy & Stair, 2000). This indicates that concise training provided by the government or Lembaga Hasil Dalam Negara to the tax payers’ will definitely result in enhancing use of e-Filing amongst tax payers’ in Malaysia.

H5: Computer self efficacy will have a positive effect on behavioral intention (BI) to use the electronic tax-filing system.

2.9.6 Facilitating Condition

Facilitating conditions representing the resources needed to engage in a behavior (Triandis, 1971). An environment with proper facilitating conditions will promote the exhibition of the appropriate behavior (Triandis, 1979). Taylor and Todd (1995) suggested that facilitating conditions be made up of 2 aspects, namely resource facilitating conditions and technological facilitating conditions. Fu, Fan and Chao (2006) elaborated that the absence of facilitating resources results in barrier to usage which may inhibit usage. The facilitating conditions consist of two sub dimensions: resource factors (RFC), such as computer equipment, and technology issues (TFC) that may restrict usage.

Peter Genuardi (2004) found that the most influential facilitating conditions that affecting their use were access to online tools, reliability of their hardware, and the financial resources required for maintenance. If a taxpayer who lack of availability of support in term of computer equipment and technologies for them to do their tax filing by e-filing system, they would not likely to adopt e-filing system.

Facilitating condition was found to have a direct relationship on infusion and adoption of a number of new information system innovations (Cheung & Chang, 2000; Jones, Sundaraman & Chin, 2002). Benbasat and Barki Quo Vadis TAM (1991) found that frequency of Internet use and previous completion of electronic transactions can have a positive impact on one’s intention to use an e-government transaction. Venkatesh, Morris, Davis (2003) found that facilitating conditions has a direct effect on actual system usage not behavioral intention. Thus, a taxpayer might be unwilling to accept e-filing if little or no computer equipment is available and if technical support is low.

H6: facilitating conditions will have a positive effect on behavioral intention (BI) to use the electronic tax-filing system.

2.9.7 Subjective Norms

According to Fishbein and Azjen (1975) subjective norm refers to “a person’s perception that most people who are important to him/her think he/she should or should not perform the behavior in question”. The explanation to this is that under significant social influence and social pressure, an individual would perform a behavior even though the individual is not in favor of performing the behavior (Venkatesh & Davis, 2000). By the way, subjective norms were determined as perceived expectations of specific referent individuals or group, and his or her motivation to comply with these expectation or beliefs. Subjective norm has been found to be more important prior to, or in the early stages of innovative implementations when users have limited direct experience from which to develop attitudes (Hartwick & Barki, 1994).

This is defined as the social pressure felt by a user to use the e-filing systems for their tax filing. The social pressure generated from those individuals that the taxpayer perceives to be important influences the decision of the taxpayer to use the e-filing systems. If there are numerous people who close with a taxpayer (who do not use e-filing) are used e-filing as their tax filing method, the taxpayer will more likely to adopt the e-filing system. For instance, people who will influence the taxpayer’s behavior think that he or she should use the e-filing system, he or she would more intends to adopt the e-filing system. Besides that, if the people around the taxpayer who used e-filing to file their taxes have more prestige, they will more motivate to adopt the e-filing system. Thus, the social influences of the taxpayer would affect the taxpayer’s intention to adopt e-filing system.

Venkatesh & Davis (2000) found that in mandatory situation for inexperienced users, subjective norm has a direct effect on intention to use as a result of information circulation by referents. At the initial stage the respondents may not be confident of their own point of view and would be easily influenced by the friends and colleagues who may have used e-Filing. The influence of subjective norm may diminish over time as knowledge on e-Filing increases and users are more confident of their own point of view.

In research of Suha AlAwadhi(2009), nearly half of participants agreed that they would be more likely to use online services if other members of their families had used them. Nearly a quarter of all participants also indicated that peers might influence their views about using online services if their experience was successful. While another quarter of participants were influenced by large numbers of people using the services, others said they would adopt any technology that made life easier. These findings suggested that users’ experience with online services would determine whether there would be any social influence on the adoption of e-government services, since good experience was likely to encourage users to recommend the services to others.

Previous researchers have found significant relationships between subjective norms and IT acceptance (Harrison et al., 1997). It is generally believed that government policy-making or government service delivery will be further helped by incorporating subjective norms (Cook, Kerr, & Moore, 2002; Lam, 1999). However, studies have shown mixed result regarding subjective norm as a predictor of intention. There are some studies have shown no significant relationship between subjective norm and intention (Davis et al., 1989; Mathieson, 1991; Chau & Hu, 2001; Lewis, Agarwal & Sambamurthy, 2003) and some studies have shown significant relationship between subjective norm and intention (Taylor & Todd, 1995; Venkatesh & Davis, 2000; Ramayah et al., 2003; Ramayah et al., 2004; Eri, 2004; Chan & Lu, 2004;Bee Lee 2005; May, 2005). The inconsistency in the literature could be because subjective norms show different effects in different conditions.

H7: Subjective Norms will have a positive effect on behavioral intention (BI) to use the electronic tax-filing system.

2.10 Summary

This study is to examine the behavior intention in adoption of e-filing system, a comprehensive theoretical model is proposed based on the previous research. The rationale for choosing all of the determinants at above as theoretical foundation of this research is as follows: (1) the adoption of e-filing system is not entirely under citizens’ control. The condition satisfies core assumption that the presence of constraints can inhibit both the intent to perform a behavior and the behavior itself; (2) in accepting e-filing system, citizens tend to be affected by external and interpersonal influences. Social influence is an important determinant of behavior; (3) individual’s self-efficacy and facilitating resources are possible barriers to user behavior intention to adopt e-filing system. Individual knowledge and facilitating resources are possible adoption barriers.

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