One of the determinants of tax compliance is tax. Tax rules often change according to certain conditions. This study examines the role of tax knowledge on volunteer compliance and trust as an ...intervention variable. The Slippery Slope Framework by Kirchler et al. (2008) was used as the framework of this study. Using a survey method using a questionnaire, this study uses a sample of 108 entrepreneurs belonging to Micro, Small, and Medium Enterprises (MSMEs) in the Special Region of Yogyakarta. The data analysis technique used is SEM-PLS. The test results show that tax compliance and trust are influenced by tax knowledge. The results of the study also show that tax knowledge increases trust. Our research also finds that trust partially mediates the effect of knowledge on voluntary taxation. The results of this study indicate the importance of knowledge and trust of taxpayers to improve voluntary tax compliance.
Tax compliance involves a decision where personal benefits come at the expense of society and its members. We explored the roles of procedural and distributive justice and citizens' perceptions of ...the tax authority's power in stimulating voluntary tax compliance. Distributive and procedural justice have often (but not always) been shown to interact in such a way that high distributive justice
high procedural justice is sufficient to predict positive responses to authorities and the social collective they represent. We examined whether this interaction predicts voluntary (but not enforced) tax compliance, in particular among citizens who perceive the tax authority's power as high (vs. low). The results of two field studies among Ethiopian (Study 1) and United States (Study 2) taxpayers supported our predictions. With this research we connect the roles of two core social psychological antecedents of tax compliance (i.e., distributive and procedural justice) with that of a deterrent factor (i.e., authority power) and obtain support for the psychological process underlying the Distributive Justice × Procedural Justice interaction in two diverging tax environments.
This article presents the strengths, weaknesses, opportunities and threats of measures taken by the STS through the Taxpayers Service Strategy for the years 2021-2026, for the tax compliance / ...non-compliance of individuals / legal entities. Following the analysis, it succeeded to identify the challenges faced by all taxpayers in the Republic of Moldova at this stage, maintaining and developing an increasing level of voluntary tax compliance, through a system of tax incentives for taxpayers, especially the elderly, on the income/wealth obtained/held by them, as well as the elaboration of proposals to mitigate the impact generated by the fiscal pressure on the level of net income of this category of taxpayers
This paper examines whether tax knowledge, tax fairness and trust affect voluntary tax compliance among small and medium enterprises (SMEs). Given the growing budget deficits and debt levels of ...developing economies, we contend that an understanding of the factors associated with voluntary tax compliance among SMEs could enhance tax revenue mobilization. Although the majority of businesses are SMEs, questions about their tax compliance have become topical among stakeholders due to perceived low levels of compliance, hence, an investigation into the factors underlying their tax compliance behavior is critical for stakeholders, particularly governments and tax authorities. We used a survey-based approach to sample 341 SMEs operating within Ghana’s oil city of Secondi-Takoradi. We employed the structural equation modeling (SEM) technique to analyze the retrieved data. Generally, our empirical results indicate that social factors and behavioral motivations are key determinants of voluntary tax compliance among SMEs in Ghana. Specifically, our results suggest that SMEs’ perception of tax fairness, knowledge about the tax system, and trust in government are significant predictors of voluntary tax compliance. Additionally, we find a significant mediating role of tax fairness in the relationship between tax knowledge and voluntary tax compliance. As governments seek to raise tax revenues and manage public debt, our results provide important insights into social and behavioral factors that could aid in enhancing tax compliance.
Plain Language Summary Governments across the globe especially those in the developing world are confronted with growing budget deficits and debt levels. This has been attributed to low tax revenue mobilization particularly non-compliance with tax laws by those operating in the informal sector. As a result, we sought to identify the factors associated with voluntary tax compliance since an understanding of these factors can assist the government to address the problem of non-compliance. We surveyed small and medium enterprises and analyzed our data using structural equation modeling. Generally, our results indicate that social factors and behavioral motivations are key determinants of voluntary tax compliance among SMEs in Ghana. Particularly, SMEs’ perception of tax fairness, knowledge about the tax system, and trust in government are significant predictors of voluntary tax compliance. As governments seek to raise tax revenues and manage public debt, our results provide important insights into social and behavioral factors that could aid in enhancing tax compliance.
The purpose of this paper is to ascertain the key factors affecting tax compliance among Vietnamese firms in Vietnam. We employ both qualitative and quantitative research methods. Qualitative ...research has been carried out through focus group discussions with ten chief accountants and tax officers. Quantitative research has been conducted through interviews with 200 firms (chief accountants or financial directors) in Vietnam. Analysis of the model includes the following stages: (i) Cronbach’s test for reliability of the scale, (ii) exploratory factor analysis (EFA), (iii) confirmatory factor analysis (CFA), and (iv) structural equation model (SEM). The results of the research show that voluntary tax compliance is directly affected by the three factors of audit probability, corporate reputation and business ownership. The probability of audit and severity of sanctions have the strongest impact on tax compliance. Therefore, the tax authorities need to strengthen the inspection of tax declarations, tax payments and tax refunds of firms. The paper confirms that enforced tax compliance is directly affected by the three factors of audit probability, sanction severity and social norms. Voluntary compliance and compulsory compliance have an effect on tax compliance, though voluntary compliance has a more powerful impact.
Purpose
The aim of this study was to examine the moderating roles of the legitimate power and distributive justice of the tax authority on the effect of procedural justice on the voluntary tax ...compliance of taxpayers in Addis Ababa, the capital of Ethiopia, by using survey data collected from taxpayers in the city.
Design/methodology/approach
Data for the study were collected from 800 sample taxpayers who were drawn by using a systematic sampling technique. The variables of the study were constructed as indices from composing the scale items developed and tested for their validity by prior researchers. Having collected the data by using a 7-point Likert scale questionnaire and forming the latent variables, hierarchical multiple regressions were applied to determine the moderating effects of the two variables (i.e. legitimate power and distributive justice) on the effect of procedural justice on voluntary tax compliance.
Findings
The author found that both the legitimate power of the tax authority and distributive justice of the authority moderate the effect of procedural justice on voluntary tax compliance. The moderating roles of the two variables appear to be opposite in that low (but not high) distributive justice and high (but not low) legitimate power of the tax authority stimulate the effect of procedural justice on voluntary tax compliance.
Research limitations/implications
The first limitation is that the data used in this study are self-reported data while the subject of the study is sensitive subject about which respondents are not believed to provide genuine responses. This is presumably because taxpayers are less likely to confess their tax evasion as they fear legal actions following their self-report. Hence, other controlled methods such as the experimental design are recommended to replicate the results of this study. The second limitation is that data for the study were gathered through a one-time cross-sectional survey and hence it would not warrant a causal claim between the study variables. Consequently, other research with a longitudinal or experimental design might warrant a causal relationship between the variables.
Practical implications
Therefore, the tax authorities must endeavor to attain high legitimacy by doing “the right things” as perceived by the taxpayers so that their tax-related decisions gain acceptance from the decision recipients. Tax policy makers as well ought to consider the importance of and the relationship between procedural justice, distributive justice and legitimate power of the tax authority in order to attain the maximum possible voluntary compliance of taxpayers that significantly reduces the administrative cost of taxes.
Social implications
The study benefits society by enhancing tax compliance and hence helping the government secure a better amount of tax revenue and provide better public goods and services.
Originality/value
The findings of this study are of high theoretical and policy significance. Theoretically, the findings contribute to the integrative literature on economic deterrence and social-psychological factors that are responsible for voluntary tax compliance decisions. The parallel moderating roles of the two variables on the relationship between procedural justice and voluntary cooperation in a single model and in the tax compliance context are novel. In terms of applicability to policy formulations, they shed light on the need for a shift from a pure focus on aggressive tax audits and penalties, especially in emerging economies to a combination of the tax audits and the nurturing of the voluntary deference of taxpayers to the tax authority's decisions. Caution must, however, be taken that the results of this study may not be applicable to tax environments in other countries.
Purpose: This paper aimed to examine the impacts of non-economic factors including: Social Norms, Tax Education, Coercive Power of Tax Authority, Legitimate Power of Tax Authority, Tax Information, ...Service Quality of Tax Authority, and Quality - Public Governance on the voluntary tax compliance of businesses in Ho Chi Minh City, Vietnam.
Theoretical framework: Findings of Cialdini and Trost, in 1998 in related to standards of effect of non-economic factors in voluntary tax compliance was reported in details, but it will including and not limit to rules constructed and standards (social norms so called) in psychological aspects. This makes a background for presnt study to completing non-economic factor.
Design/Methodology: The study used questionnaires to collect date from survey subjects who are accountants, chief accountants and financial directors of businesses in Ho Chi Minh City, Vietnam. The questionnaire consisted of 2 parts. The first section included an introduction to the business and participants answering the questionnaire. Part 2 included content related to voluntary tax compliance and factors affecting voluntary tax compliance. With 501 valid responses from the survey subjects, the author test the hypotheses in the research model (Structural).
Findings: The research results found that all 7 factors had a significant impact on voluntary tax of businesses in HCM City, Vietnam. Government, tax authorities, and universities basing on this research can come up with more appropriate solutions to enhance the tax compliance (voluntary) behavior of businesses.
Research, Practical & Social implication: this study only analyzed the factors of internal enterprise characteristics affecting the high and low level of non-compliance with corporate income tax, but not yet included in the research model to analyze other factors as important as those outside the business, etc. It is really necessary to come up with more appropriate solutions to strengthen the voluntary tax compliance behavior of businesses, increase revenue for the budget, and contribute to the development of the country and society.
Originality/ value: suggestions for solutions should be taken to increase the tax revenues for the city is stated in present work. Via our study (testing non econ variables), findings tell us that all 7 factors tested had a positive impact on voluntary tax compliance. They included social norms, legal power of tax authorities, coercive power of tax authorities, tax education, service quality of tax authorities, tax information quality public administration; in which, tax education had the most influence, while coercive power of tax authorities had the least influence.
•Procedural justice promotes voluntary compliance with tax authorities.•This effect is found particularly among citizens with low trust in tax authorities.•The above interaction is restricted to ...those who weakly identify with the nation.•This leads to a three-way procedural justice×trust×identification interaction.•The three-way interaction is obtained among Ethiopian and US tax payers.
We investigated the interactive roles of procedural justice of the tax authority, trust in the tax authority, and identification with the nation in predicting voluntary tax compliance. Drawing from fairness heuristic theory and relational models of justice, we predicted that the relationship between procedural justice and voluntary tax compliance that has been found particularly among citizens with low (vs. high) trust in the tax authorities is restricted to citizens who weakly (vs. strongly) identify with the nation. The results of a field study with samples of Ethiopian and US taxpayers as respondents largely support our predictions. This research integrates the role of important and well-studied social psychological factors that shape voluntary tax compliance and reveals support for the hypothesis in a developing (i.e., Ethiopia) and a developed (i.e., US) nation – nations with strongly divergent tax climates.
The datasets included in this article come from a survey carried out on a group of Polish students and self-employed entrepreneurs and were originally created for studies on tax behaviour under the ...slippery slope framework. The slippery slope framework explains the role of extensive power execution and building trust in the tax administration in enhancing either enforced or voluntary tax compliance accordingly 1. Students of economics, finance, and management at the Faculty of Economic Sciences and the Faculty of Management at the University of Warsaw were surveyed in two rounds, in 2011 and 2022, using paper-based questionnaires handed to them personally. Entrepreneurs were invited to fill in online questionnaires in 2020. Questionnaires were filled in by self-employed individuals from the Kuyavia-Pomerania, Lower Silesia, Lublin, and Silesia Province. The datasets provide 599 records for students and 422 observations for entrepreneurs. The purpose of collecting these data was to analyse the attitudes of the mentioned social groups towards tax compliance and tax evasion under the slippery slope framework along two dimensions: trust in authorities and power of authorities. The sample was selected because students in these fields are the most likely to become entrepreneurs, so the study sought to capture the potential behavioural change that is taking place. Each questionnaire consisted of three parts, a description of a fictitious country (Varosia) in one of four scenarios: (1) high trust-high power; (2) low trust-high power; (3) high trust-low power; (4) low trust-low power, 28 questions including manipulation checks on trust in authorities and power of authorities, intended tax compliance, voluntary tax compliance, enforced tax compliance, intended tax evasion, tax morale and the perceived similarity between Varosia and Poland, and finally two questions on gender and age of respondents. The data presented are particularly useful for policymakers in shaping tax policy and economists in analyses regarding taxation. Researchers may be interested in reusing the provided datasets for comparative research in other social groups, regions, and countries.
This paper reviews the empirical literature studying the effect of the introduction of presumptive taxation methods on taxpayers’ behavior. Although the concept of presumptive taxation entails ...numerous alternative methods to determine tax liabilities, I survey two main areas of the literature: indirect tax assessment methods and presumptive minimum taxes. The review investigates efficiency and equity implications of presumptive taxation methods. Conflicting conclusions emerge about the effectiveness of presumptive policy tools in achieving different goals, such as the increase of voluntary tax compliance, the growth of tax revenues, and the reduction of shadow economy and fiscal evasion.
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