Abstract
Slope has attracted exceptional attention from researchers in economic psychology and taxation field through validation by renowned scholars via variety of surveys and experimental designs. However, application of cross-sectional analysis in validating the framework has been scant, the available studies being focused on a single continent only. This study aims to test the assumptions of Slippery Slope Framework through examination of the influence of trust in authorities and power of authorities on tax compliance globally. The sample of 158 countries was selected as of 2016. Data was analyzed through Ordinary Least Squares Regression Analysis. The results reveal that trust in authorities significantly influences tax compliance, but power of authorities does not. Additionally, the interaction effect of trust and power on tax compliance has not been established through this cross-country analysis. Practically, the results suggest that authorities should ensure judicious use of taxpayer monies in the provision of public goods and services, and also fairness and equity among taxpayers. Eventually, these will enhance trust and improve tax compliance. Theoretically, the study calls for disaggregation analyses where each continent will be studied individually for replication of these findings and establishing the interaction effect wherever possible.
Highlights
Investigation of why individuals adhere to their tax obligations was hitherto dwelled on the “deterrence models” of Becker (1963), Allingham and Sandmo (1972) and Srinivasan (1973)
TThe study validates the key assumption of the “Slippery Slope Framework” from the perspective neglected by the extant literature
It was found that trust in authorities has a significant positive influence on tax compliance while the power of authorities has not
Summary
Investigation of why individuals adhere to their tax obligations was hitherto dwelled on the “deterrence models” of Becker (1963), Allingham and Sandmo (1972) and Srinivasan (1973). It explained that optimal tax compliance is achievable either through trust in authorities (voluntary tax compliance) or through power of authorities (enforced tax compliance) or an interaction between them Following these backgrounds, the central argument in this paper is the lack of comprehensive global evidence for cross-country analyses so that to provide global insights on the assumption of this framework. The largest number of the countries sampled under such methodology was 37, while in this study 158 countries were sampled, we expect to provide more robust results This robust result is expected to offer insights on universal applicability of the framework since it was tested using global cross-country data. Following these arguments, the objective of the study is twofold. The last part presents conclusions, implications as well as recommendations for future research
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