Impact of attitude variables, Tax rate and perceptions of government fairness on Tax Compliance

Abstract

This study aims to scrutinize the interconnection between attitude variables and tax compliance behavior of the taxpayers. The survey research study regarding the people’s attitude towards taxation is carried out in Hetauda Sub–Metropolitan City of Makawanpur district in June 2020. The sample size of this study encompassed 300 taxpayers selected randomly from entire population. The questionnaire involved twenty-seven five-point Likert scale questions, and seventeen categorical type questions were asked to the respondents. The study applied the logistic regression model to measure the effect of attitude on tax compliance behavior. This research study has some policy implications for encouraging the government to improve tax policy of the nation. The fairness of the tax system definitely affected the tax acquiescence behavior. The respondents doubted the fairness of the government concerning taxation based on data. The collective attitude of the taxpayers was highly negative among different taxpayers under the tax rate and government fairness. The results of the study revealed that taxation policy design and implementation mattered to taxpayers in Nepal. It further recommends the tax administration to reduce tax rates and adopt fair tax strategies for the welfare and justice of the various tax payers. A low tax compliance problem is related to low tax revenue of a particular country. The beauty of this study is to bridge the knowledge gap of emerging issue of the tax compliance behavior in several ways.