Abstract
This study aims to obtain the results of value added tax (VAT) compliance through behavioral decision theory with work personal attributes of the taxpayer's, tax understanding and taxpayer education, and ability to pay theory with tax compliance cost and audit system as a connecting variable to VAT compliance. The researcher randomly selected sample of n= 172 small and medium enterprise owners from Jordan by using web-based survey questionnaires. Data analysis uses the SPSS 23.0 and validates the relationship between study variables. The researchers also propose a research model support by the behavior decision theory and the ability to pay approach. Findings reveal a strong positive relationship between personal characteristics, VAT education and tax compliance under both theoretical grounds and also indicate a positive correlation between VAT compliance cost, audit system and VAT compliance in Jordan. Addressing the understudies, this study extends the role of value added tax practices in SMEs. It provides some useful information to the government and policy makers to develop and impose the value added tax law on SMEs Level. Therefore, the researcher suggests more studies to investigate the factors affecting VAT compliance in Jordan by using the proposed conceptual model under consideration.
Highlights
Public Services are responsible for covering everything, including the health system, social security, welfare, education, infrastructure development and others
This study aims to obtain the results of value added tax (VAT) compliance through behavioral decision theory with work personal attributes of the taxpayer's, tax understanding and taxpayer education, and ability to pay theory with tax compliance cost and audit system as a connecting variable to Value Added Taxes (VAT) compliance
The current study highlighted some of these factors and the results are compatible with the study conducted by (Loureiro, 2016; Podlipnik, 2017) as they consider value Added Tax compliance as a result of one’s personal behavior and costs attributed to local tax system in the country
Summary
Public Services are responsible for covering everything, including the health system, social security, welfare, education, infrastructure development and others To manage these functions, the government obligates the citizen to pay taxes as with the collective action, public interest and development are possible (MFO, 2016). The government obligates the citizen to pay taxes as with the collective action, public interest and development are possible (MFO, 2016) These taxes are directly associated with economic growth and development. Governments used to collect taxes only from the narrow group of citizens; with time, categories, types and amounts of taxes kept on changing and expanding For this purpose, the tax system introduced several fundamental principles that ensure the designated level of revenue depending on the specific economic and fiscal policies of the current state (OECD, 2015; Salloum, Al-Emran, et al, 2019).
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