How Does Propaganda Affect Tax Compliance: An Empirical Study Based on the Theory of Planned Behavior in China

Li Zhiwei,Hao Weiqi,Zhang Qing,Zhang Huang,Chen Wenjiao

doi:10.11648/j.ss.20200905.16

Abstract

Tax propaganda has always been an important task for the whole nation's financial system at all levels for all countries, although the importance of tax propaganda has been deeply recognized by tax administration authorities and previous studies, but the affecting mechanism of tax propaganda still lacks empirical study support. In order to close the gap regarding the affecting mechanism of tax propaganda on tax compliance, a questionnaire survey was conducted regarding the tax compliance intention of 304 individual industrial and commercial taxpayers in China. Based on the theory of planned behavior, the analyses reveal that tax compliance attitude, subjective norms and perceived behavioral control completely mediate the impact of tax propaganda on tax compliance intention, which shows the dominance of this mechanism. What is more, tax compliance attitude is the most important mediating variable, and the role of subjective norms is only half that of attitude, while perceived behavioral control has less than half the role of subjective norms. In addition of this, although the moderating effect is relatively small, but tax service satisfaction still negatively moderates the mediating effect of attitude and subjective norms. Through these research findings, our study has taken a step towards understanding the mechanism of tax propaganda on tax compliance.

Highlights

Tax evasion, tax arrears, tax resistance and other tax losses are common phenomena that have always accompanied taxation
Tax compliance attitude, subjective norms and perceived behavioral control completely mediate the impact of tax propaganda on tax compliance intention, which shows the dominance of this mechanism; that is, the impact of tax propaganda is achieved through three channels on taxpayer intention
Based on the theory of planned behavior, this research shows that tax compliance attitude, subjective norms and perceived behavioral control mediate the relationship between tax propaganda and tax compliance behavior intention, while tax service satisfaction plays a moderating role

Summary

Introduction

Tax arrears, tax resistance and other tax losses are common phenomena that have always accompanied taxation. The loss of tax revenue is a major problem that has long plagued Chinese tax authorities. Jia calculated that from 2003 to 2013, the proportion of Chinese tax losses to the gross domestic product was between 9.99% and 13.9%[39]. The "Reform Plan for Tax Collection and Administration System of National Tax and Local Tax" issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council in July 2018 emphasized the reform goal of "improving tax compliance". There are various strategies for improving tax compliance, such as improving the tax system, rationalizing tax relations, and strengthening tax collection and management. Among them, strengthening tax propaganda has become an increasingly important strategic countermeasure to enhance tax compliance in China

Methods

Results

Discussion

Conclusion