Slippery Slope Framework Research Articles

Determinants of Tax Compliance Behavior: A Case Study in Ethiopia

Policymakers and tax authorities in developing countries face challenges in comprehending the determinants of tax-compliance behavior. This study employs empirical investigation to explore the factors that influence taxpayers’ voluntary and enforced tax compliance behaviors. Data were collected through a survey questionnaire distributed to 400 taxpayers using simple random sampling and analyzed using an ordered logit model. The results validate the assumptions of the slippery slope framework, showing that trust significantly impacts voluntary tax compliance and that a strong tax authority’s power contributes to more enforced tax compliance in Ethiopia. Additionally, the interaction between trust and power has a more significant effect on enforced tax compliance. This study also emphasizes the importance of improving trust in increasing tax compliance. Moreover, factors such as equity, fairness, tax knowledge, effective tax usage, and taxpayer morale contribute to tax compliance. By identifying factors that contribute to tax compliance, the findings of this research provide valuable insights for tax authorities in Ethiopia and other developing countries in devising strategies to combat tax evasion. This includes implementing a fair tax regime, enhancing the perceived value of public services financed by tax payments, increasing tax knowledge activities to help people understand the importance of paying taxes, and fortifying frameworks to minimize extravagant spending for maintaining public trust and ensuring effective and efficient use of taxpayers’ money.

Effect of Transfer Pricing on Corporation Tax Compliance Among Multinational Corporations in Nairobi Kenya

Purpose: Tax is a compulsory contribution that is made by the citizens of a country to the government for the provision of public utilities. It is evident from the National Tax Policy, 2024 that the Kenya Revenue Authority (KRA) and the government at large have recently shown a lot of interest in multinationals due to the complexity of their operations and the tendency for them to come up with complex tax avoidance mechanisms. This has also been complicated by the widespread abuse of transfer pricing models adopted when dealing with multinational corporations operating in Kenya. This study looked into effect of transfer pricing on corporate tax compliance among multinational corporation companies in Kenya. The study was guided by the following theories, AS theory, the Slippery Slope Framework, and the theory of the planned behavior. Methodology: The study employed an explanatory research design. The target population was 221 multinational corporations’ companies and a sample size of 142 respondents. Questionnaires were used to collect primary data and analysis was descriptive statistics include frequency, percentage, and mean while inferential statistics included correlation and multiple regression. Results: The study findings found out most companies in Nairobi, Kenya have transfer pricing policies that are moderately but not adequately in line with domestic tax statutes. Most companies will use transfer pricing as a tool to reduce their tax liabilities. Further, KRA is moderately but not adequately efficient in monitoring and regulating transfer pricing practices in our company. Conclusion: The study results concluded that transfer pricing affects corporation tax compliance Based on the findings, the study recommends there is a need for exchange of information and more international collaborative efforts from a policy, legal, and academic front to address aggressive tax avoidance practices from MNCs. Therefore, future studies can be conducted on the impact of Dispute resolution mechanism on corporation tax performance.

The Power of Tax Authority and Tax Compliance: Does Tax Literacy Matter?

Purpose: Our research aims to prove the influence of tax authority power (coercive and legitimate), tax morality, perception of fairness, and religiosity on tax compliance. Also, we test the moderating effect of tax literacy on the influence of the relationship between perceived fairness and coercive power on tax compliance. Methods: This research used 199 respondents determined by convenience sampling, snowball sampling technique. Data were analyzed using Partial Least Squares based Structural Equation Modeling (PLS-SEM). Result: We report that legitimacy power, tax morale, and religiosity positively influence tax compliance. On the other hand, coercive power and perceived fairness do not influence tax compliance. Moreover, our study reports that tax literacy has a role in reducing the influence of perceived fairness on tax compliance. Novelty: Our study contributes to expanding literature in two important ways. First, we re-examined the influence of the power of tax authority on tax compliance of university employees who experienced a change in university status from a public university to a state university with legal entity status (PTN-BH)-causing a change in tax rates. Second, we expand the slippery slope framework by proving the role of tax literacy in increasing the influence of the power of tax authority on tax compliance.

Determinants of enforced and voluntary tax compliance: Adopting slippery slope framework

Research aims: This research aims to scrutinize the influence of factors impacting voluntary tax compliance and enforced tax compliance using the variables of power of authorities and trust in authorities.Design/Methodology/Approach: This study employed a research sample of Micro, Small, and Medium Enterprises (MSMEs) taxpayers in the Special Region of Yogyakarta represented by business school students, utilizing a questionnaire survey via Google Form with a purposive sampling method. The total number of questionnaires distributed was 60 questionnaires, with 59 questionnaires that could be processed. Data analysis was then carried out using the partial least squares (PLS) approach.Research findings: The results of this study demonstrated that using the slippery slope framework theory, trust in authorities was positively associated with voluntary tax compliance, while the power of authorities was negatively associated with voluntary tax compliance. Trust in authorities, however, did not have any impact on enforced tax compliance. Additionally, the power of authorities exerted a positive effect on voluntary tax compliance.Theoretical contribution/Originality: This study provides an understanding of the factors influencing tax compliance by referring to the slippery slope framework theory. Apart from that, this research field is still relatively underexplored in Indonesia.Practitioner/Policy implication: This study can be used to determine the factors driving and inhibiting MSMEs' taxpayer compliance so that it can be used as input and consideration to improve services related to taxpayer compliance further.Research limitation/Implication: This study can serve as a valuable resource for future research and the generation of new ideas. Also, it can be utilized as a reference in educational materials pertaining to aspects that promote taxpayer compliance.

Accountants’ perspective on tax amnesty enhances tax compliance dimensions in extended slippery slope framework

Accountants’ perspective on tax amnesty enhances tax compliance dimensions in extended slippery slope framework

Core tax administration system: the power and trust dimensions of slippery slope framework tax compliance model

Core tax administration system: the power and trust dimensions of slippery slope framework tax compliance model

TRUST–POWER RELATIONSHIP AND TAX REPORTING BY PLATFORM WORKERS: A MODERATED MEDIATION MODEL

The power and trust relationship between tax authorities and taxpayers is thought to be important in shaping taxpayer compliance behaviour. Although a growing number of studies have considered moral and emotional elements in tax decision-making, the nexus between taxpayers’ honest intention and feelings of guilt towards their tax-reporting decision remains unclear. In support of studies on the digital or platform economy and the rising number of individuals earning income digitally, this study seeks to identify factors that influence individuals’ tax reporting decision of their digital income. Applying the Slippery Slope Framework, this study uses a 2 x 2 between-subjects factorial experimental design, in which the independent variables of this study, i.e., power and trust are manipulated. This study conducts a scenario-based experiment with eighty platform workers on an established digital platform. The findings reveal that high trust in authorities increases platform workers' intention for honesty reporting and guilt for misreporting, promoting tax-reporting compliance. Moreover, this relationship is significantly moderated by the high-power condition. Specifically, it is believed that both enforcement and trust matter in achieving compliance in taxpayers’ reporting.

THE ROLE OF SOCIAL NORMS IN TAX COMPLIANCE BEHAVIOUR OF SMES IN EMERGING ECONOMIES LIKE UGANDA

Taxpayers have different motivations for paying taxes. How successfully taxpayers comply with the tax system will depend on the social standing of the taxpayers and the ability of the tax authority to impose the legal requirements for such a system. We have had minimal corporate tax revenue contributions to the overall tax revenue in Uganda, especially from small and medium corporations over the past decade and relatively little attention has been directed towards understanding what the challenge could be. Could corporate tax compliance behaviour be determined by the power dimensions or social psychological stance, and in which magnitude? Evidence has cast doubt on the ability of power dimensions to effectively influence tax compliance behaviour, suggesting that social norms may be an influential tool in determining tax compliance behaviour. Combining descriptive and analytical research design and utilising a structural equation model, the study helps to provide answers to these questions using social norms theory and the slippery slope framework. Descriptive norms generally have significant direct effects on tax compliance behaviour.

Voluntary and enforced tax compliance determinants and impact among agrochemical businesses in Ghana

PurposeThis paper examined tax compliance and its impact on agrochemical traders in Ghana.Design/methodology/approachBased on the registered agrochemical lists obtained from the Plant Protection and Regulatory Service Department, 92 agrochemical traders were sampled for data collection. Probit regression was used to estimate determinants of tax compliance, whereas the Inverse Probability Weighted Regression Adjustment Model was employed to evaluate the impact of tax compliance on business performance.FindingsThe results revealed that age and gender relate positively to enforced tax compliance, while education positively impacts voluntary tax compliance. Nonetheless, tax rate, trust and monthly sales positively affect voluntary tax compliance but negatively impact enforced tax compliance. Inversely, while authorities’ power negatively impacted voluntary compliance, it positively influenced enforced tax compliance confirming the Slippery Slope Framework.Originality/valueTo the best knowledge of the authors, this paper is the first to investigate tax compliance determinants and impact among agrochemical traders, despite the tremendous growth of the agrochemical sub-sector in Africa and Ghana. Therefore, this study makes a modest contribution to empirical studies that validate the Slippery Slope Framework in promoting tax compliance in the agricultural and agribusiness sectors of a developing country. Similarly, it also unearths the impact of tax compliance on agribusiness growth which has yet to be highlighted in the extant literature.

The slippery slope framework: A comprehensive evaluation of factors affecting trust and power

Many empirical studies have been conducted to test the assumptions of the slippery slope framework (SSF). However, although the SSF theory has introduced several tax compliance factors that are believed to have associations with trust in tax authorities and power of tax authorities, most studies tend to include only the two main domains of trust and power in the analysis. None of these studies comprehensively investigates the factors. Therefore, this study is dedicated to fully elaborating on these factors and their correlations with the two main domains of trust and power separately and simultaneously. The results show that most factors are proven to significantly influence trust and power. Tax penalties, norms, distributive fairness and retributive fairness significantly and positively influence trust, while audit probabilities, tax penalties, attitudes, norms and retributive fairness have significant and positive correlations with power. The results also confirm the main SSF assumptions that trust leads to voluntary compliance, while voluntary compliance positively affects overall tax compliance. However, this study fails to demonstrate the relationship of power with enforced compliance, while enforced compliance is found to negatively affect overall tax compliance.

Regulating sharing platforms in lateral exchange markets: the role of power and trust

PurposeThis paper aims to examine different types of sharing platforms based on risk perceptions of product/service providers and users, and to illustrate appropriate platform regulation preferences.Design/methodology/approachA survey was used (N = 540) to collect data on platform participants’ risk perceptions and regulation preferences in the Chinese (N = 263) and the US markets (N = 277). Cluster analysis and multiple correspondence analysis were used to categorise platforms and match their regulation preferences with the risk characteristics.FindingsThe results show that i) four types of sharing platforms are categorised in terms of the risk perceived by the supply and demand side, and ii) four types of regulation preferences are clustered, drawing on the power and trust elements proposed from the slippery slope framework. Furthermore, coercive power regulation is favoured by participants of platforms with high supply risk and low demand risk, legitimate power regulation is preferred by actors of platforms with low supply risk and high demand risk, reason-based trust regulation is preferred by actors of platforms with high supply and demand risk, and implicit trust regulation is favoured by participants of platforms with low supply and demand risk.Research limitations/implicationsThis paper develops an empirical typology of platforms based on risk perceptions of providers and users, and advances our understanding about lateral exchange markets from a consumer perspective.Practical implicationsThis paper provides implications for platforms to regulate transactions through two mechanisms – the power of platforms and trust in platform participants.Originality/valueRegulating by power ensures transaction security while regulating by trust enhances transaction efficiency, so it is important to configure the power and trust elements in platform regulation in an appropriate manner. To the best of the authors’ knowledge, this paper is one of the first attempts at addressing platform regulation and shows how consumers’ risk perception of platforms can lead to important implications for theory and practice in marketing and better regulation of platform transactions.

Review of Personal Taxpayer's Compliance Level with Slippery Slope Framework Approach

This research used a combined approach between economic and behavioral approaches to analyze tax compliance, known as Slippery Slope Framework. This framework stated that there are two important factors that affect tax compliance in paying taxes and carrying out their tax obligations, those two factors are taxpayer trust on tax authority and the power of tax authority. The “slippery slope” framework assumes that economic determinants of tax behavior represent authorities’ power, which leads to enforced tax compliance. On the other hand, psychological determinants lead to trust in authorities and also to voluntary tax compliance. The purpose of this research is to analyze the level of compliance of individual taxpayers when it is associated with factors that affect the level of tax compliance based on the slippery slope framework approach. The data set of the research was obtained from the survey to individual taxpayers using accidental sampling technique. The results of this research indicate that taxpayers have very good trust in the tax authorities and most taxpayers agree with the statement that trust in tax authorities affects taxpayer compliance. Based on that trust, taxpayers carry out their tax obligation voluntarily. Meanwhile, the results on the power of the tax authority show that the power of the tax authority has a neutral influence on taxpayer compliance. Based on these results, it can be concluded that the taxpayer trust factor is a factor that greatly influences taxpayer compliance in carrying out their tax obligations.

Coercive and legitimate power in the sharing economy: Examining consumers’ cooperative behavior and trust

• Coercive and legitimate power are used in the sharing economy. • Legitimate power has an impact on cooperative consumer behavior and trust. • Coercive power has an impact depending on the form of organization. • Sharing economy should invest in legitimate power but be careful with coercive power. Sharing economy organizations depend on customer cooperation. According to the existing theory, namely, the extended slippery slope framework, coercive and legitimate power are two means of achieving cooperation and trust. Based on this theory, we examine the role of coercive and legitimate power in the sharing economy in four studies. Study 1 has examined the extent of existing sharing organizations’ coercive and legitimate power (B2C, P2P, and communities) by employing website analysis. In Study 2, consumers have discussed which forms of power (coercive or legitimate) were perceived by sharing organizations in focus groups. Study 3 has investigated the impact of coercive and legitimate power on consumer cooperation in a laboratory experiment using a give-or-take-some (GOTS) game. Study 4 has examined the impact of coercive and legitimate power on cooperation using an experimental online questionnaire. We find that providers of sharing economy services highlight coercive measures on their websites, whereas consumers in the focus group discussions highlight the importance of legitimate power, as is evident in the experiments. Thus, while sharing organizations could increase their use of legitimate power, they should apply coercive power carefully.

A self-employed taxpayer experimental study on trust, power, and tax compliance in eleven countries

The slippery slope framework explains tax compliance along two main dimensions, trust in authorities and power of authorities, which influence taxpayers’ compliance attitudes. Through frequentist and Bayesian analyses, we investigated the framework’s assumptions on a sample of 2786 self-employed taxpayers from eleven post-communist and non-post-communist countries doing business in five economic branches. After using scenarios that experimentally manipulated trust and power, our results confirmed the framework’s assumptions regarding the attitudes of the self-employed taxpayers; trust and power fostered intended tax compliance and diminished tax evasion, trust boosted voluntary tax compliance, whereas power increased enforced tax compliance. Additionally, self-employed taxpayers from post-communist countries reported higher intended tax compliance and lower tax evasion than those from non-post-communist countries. Our results offer tax authorities insights into how trust and power may contribute to obtaining and maintaining high tax compliance levels amid global economic challenges, downturns, and increasing tax compliance costs.

Trust, Power, and Tax Risk into the “Slippery Slope”: A Corporate Tax Compliance Model

(1) Background: There are still few studies that discuss corporate tax risk, especially those related to tax compliance and the Slippery Slope Framework. Meanwhile, in practice, tax risk, which is tax uncertainty, is essential in corporate tax compliance. Tax risk has not been discussed in the Slippery Slope Framework in previous research, which has become a reference in various tax compliance studies. Therefore, this study aims to analyze the effect of tax risk induced into the slippery slope framework at corporate taxpayer compliance. Dynamic interactions between power, trust, and tax risk (TPR) in one framework are essential to see the tax compliance model’s determinants comprehensively; (2) Methods: We defined our model using a mathematical and economic approach with a Likert scale, as well as geometrical inferences based on the Slippery Slope Framework. (3) Results: This study found that tax risk affects the effort and tendency of corporate taxpayers to comply. The level of tax risk will make it easier or more difficult for corporate taxpayers to comply. Tax risk will affect the level of tax compliance regardless of the quality of trust and existing power; (4) Conclusions: This research’s theoretical contributions are that trust and power are determinants of tax compliance and that tax risk influences companies to be more compliant. This model is to complete the conceptual gap of the determinants of tax compliance from the perspective of the Slippery Slope Framework. The practical implication is that corporate taxpayers should manage tax risk to avoid unexpected tax outcomes in the future and be more compliant. Therefore, the government needs to help companies reduce compliance risks that cannot be controlled by companies but can be influenced by tax authorities.

Perceptions of trust and power are associated with tax compliance: A cross-cultural study

The slippery slope framework (SSF) of tax compliance postulates that taxpayers’ compliance behaviour depends on the two dimensions: trust in authorities and power of authorities. In an attempt to overcome common-method biases, the present study tests the main assumptions of the SSF with a sample of 44 countries/regions. Country/region-level trust and power indices are calculated based on experimental data involving 14,509 participants and related to shadow economy estimates and – as an alternative indicator of non-compliance – corruption indices. The results indicate that both trust and power are negatively related to the size of the shadow economy and the extent of corruption. These results emphasise the importance of both SSF dimensions in combating tax evasion and counterproductive behaviour within a society in general.

Kepatuhan Wajib Pajak Pada Masa Pandemi Covid 19: Ditinjau Dari Slippery Slope Framework

This study aims to find empirical evidence of the influence of Slippery Slope Framework that is measured by the trust in tax authorities and the influence of the power of tax authorities on taxpayer compliance during the covid-19 pandemic. The data were obtained from corporate taxpayers registered with Tax Service Office (KPP) Pratama Batu in November – December 2021. The sampling was determined by using purposive sampling technique and the research instrument used questionnaire technique. The data analysis method used is PLS-SEM with 47 corporate taxpayers as samples. The results show that the compliance of corporate taxpayers registered with KPP Batu during the Covid 19 pandemic was quite good, while the results of hypothesis testing is that the power of the tax authorities had a significant positive effect on taxpayer compliance, while trust in the tax authorities had no effect on taxpayer compliance.

KEPATUHAN WAJIB PAJAK UMKM DI KABUPATEN BADUNG BERDASARKAN PERSEPSI KEPERCAYAAN WAJIB PAJAK DAN KEKUASAAN OTORITAS PAJAK

The ratio of submission of Annual Tax Returns at two Tax Service Offices with the working area of Badung Regency is still relatively low when compared to national tax compliance. With more than a quarter of the population owning MSMEs, MSME taxpayer compliance in Badung Regency is an interesting phenomenon to study. This qualitative research aims to determine the compliance of MSME taxpayers seen from the perception of trust in the government and the power of the tax authorities in accordance with the slippery slope framework theory by Kirchler, et al (2008). Collecting data using in-depth interview techniques with 13 informants consisting of 8 MSME taxpayers in Badung Regency, 1 academician, and 4 practitioners as a form of triangulation. This study found that even though trust in the government was not high, MSME taxpayers remained voluntarily compliant as long as they had income and for the convenience of their business. On the other hand, coercive power, especially sanctions and supervision, has more dominant influence than persuasive power. Taxpayers with the post-conventional moral stage are more affected by persuasive power than those in the pre-conventional stage. The results of this study are expected to assist the tax authorities in making policies to improve taxpayer compliance.

Differences in tax evasion attitudes between students and entrepreneurs under the slippery slope framework

We raised a question of differences in declared tax evasion attitudes between students and entrepreneurs under the slippery slope framework of tax compliance. Scenarios were used to manipulate the two dimensions of the framework, trust in authorities and power of authorities (high versus low trust; high versus low power), in an imagined country named Varosia. After reading one of the four scenarios, economics and finance students and entrepreneurs from Poland reported their tax compliance intentions. Tax evasion attitudes were different for entrepreneurs and students. Results indicated that students were more prone to tax evasion but this effect could be mitigated by particularly increasing the power of authorities. Conversely, for entrepreneurs, trust in authorities had a stronger impact on tax compliance than enforcement. Low tax morale was a significant predictor of high tax evasion in both groups.

Trust or Power: Improving Tax Compliance by Self-Employed Professionals

This article considers non-compliance with tax legislation by self-employed professionals, using qualitative data on the tax compliance attitudes of lawyers and dentists in Kenya. The main argument is that corruption and inadequate service delivery, over which the revenue authority has no control, lower tax morale and limit the effectiveness of trust in the authority in increasing voluntary compliance. It is further argued that, under such circumstances, stringent detection and enforcement measures would be more helpful in enhancing these taxpayers’ compliance. This research contributes to the literature on the slippery slope framework on trust and power; most of the empirical work on the framework derives from countries with lower levels of corruption and better public service delivery than most African countries. Thus, this article enhances the understanding of the relationship between trust and power in the context of tax compliance among professionals in Kenya and provides some beneficial insight that may be relevant for other African countries. Tax evasion, trust, power, corruption, tax administration, audits, cooperative compliance, slippery slope framework, Kenya, Africa