Abstract
Purpose – This paper primarily investigates the relationship between the taxpayers’ perception of the tax policy changes and the tax compliance in Sri Lanka. The researcher also aims to provide advice to the policymakers about the specific approach to be followed when considering the tax relief measures and also emphasizing the importance of maintaining a flexible tax policy during the epidemic period which will be crucial in meeting the revenue target of the government. Design/Methodology/approach-The researcher used questionnaires to gather primary data from 125 respondents and then editing to spot errors and omissions for the aim of creating necessary corrections and at last, apply statistical tools for data analysis using SPSS software. Findings – The results show that taxpayers’ attitudes toward the changes in the tax policy and tax compliance form a strong positive relationship and further, changes in its policy have a significant impact on their compliance level. Cronbach’s alpha exceeds 0.7 implies that instruments are sufficiently reliable for the measurement. Originality/value- This was the first study undertaken to explore the link between the attitude toward the tax policy changes and the tax compliance in Sri Lanka during the Covid-19 epidemic period. This study guides to fill up the existing research gap in the country and further, directions are also useful for future researchers to undertake an identical survey.
Highlights
Assessing the tax compliance in an exceedingly country like Sri Lanka is necessary for the present context it’s important to formulate necessary ways to spice up the extent of tax compliance in an exceedingly country to meet the govt. revenue targets which may facilitate to satisfy each capital and recurrent expenditure of the govt
Looked at how various tax authorities respond against the impact of Covid-19 in terms of giving a range of tax relief for the business communities and searched about both theoretical and managerial implications linked with it
The researcher found that based on the supported results of the correlation test and the results of the regression analysis, taxpayers’ perception toward the changes in the tax policy of the government forms a strong positive association with tax compliance in Sri Lanka and has a significant impact on their compliance behavior
Summary
Assessing the tax compliance in an exceedingly country like Sri Lanka is necessary for the present context it’s important to formulate necessary ways to spice up the extent of tax compliance in an exceedingly country to meet the govt. revenue targets which may facilitate to satisfy each capital and recurrent expenditure of the govt. It has been determined that country is exhibiting a weak tax compliance behaviour due to tax administrationconnected problems (Jayaratne, 2015),who further highlights that the tax base in Sri Lanka has not broadened in line with the expansion in economic activities This was partially due to the tax exemptions, tax evasion, and due to the poor tax administration and on the other hand, several tax laws were not updated and they are more complex and rather difficult to understand by average taxpayers that were caused to discourage by most of the taxpayers to comply with tax rules and regulations thereby, bit by bit declined the extent of compliance. Data relating to the return compliance rates for income tax and the other three forms of taxes are given within the following Table 1, 2 respectively (CGIR, 2018)
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