Tax Morale Research Articles

Effect of Tax Morale on Value Added Tax Compliance Among Medium Taxpayers in North of Nairobi Tax District, Kenya

Purpose: Tax compliance is important as it has a direct impact on revenue for most governments around the world. Despite the reforms that the Kenya Revenue Authority has been undertaking to increase revenue collection, it has of late failed to meet its revenue targets, particularly VAT targets. There has also been existence of fluctuations in VAT collection over the past couple of financial years. The objective of the study is to showcase the effect of tax morale on Value Added Tax compliance among medium taxpayers in north Nairobi tax district, Kenya. The study has been guided by the ability to pay theory. Methodology: The study adopted the explanatory research design and primary data was collected using structured questionnaires with closed-ended questions. The total target population was 2,376 VAT-registered medium taxpayers in north of Nairobi tax district, Kenya and the sample size was 342 respondents. Out of the 342 respondents targeted, 274 questionnaires were correctly filled and returned, indicating 80% response rate. Results: The study also found that tax morale had a positive and significant effect on Value Added Tax compliance β=0.173 p-value =0. 016. Conclusion: The study recommends that the government of Kenya should allocate resources towards improving taxpayer services, including helplines, online portals, and advisory services.

Family affairs or Government's duty? The tax morality of a mobile society

PurposeThis paper aims to shed light on the relationship between intergenerational labor mobility and tax morale among European citizens, given the relatively limited evidence on the potential influence of tax compliance behavior on future inequalities.Design/methodology/approachExploiting data from the European Values Study (2008), we show that the larger the intergenerational mobility, i.e. better economic conditions of children respect to their parents, the larger the willingness to pay taxes. In this vein, the subjective tax payment may be meant as an investment which could be rewarded with a more mobile society result by considering different estimation strategies. This evidence remarks the importance to foster intergenerational mobility to build a more tax-compliant society.FindingsThe linkage between mobility and tax morale is stronger and significant across citizens living in high income classes, and in countries where there is a commitment of the Government in guaranteeing more opportunities to citizens regardless of their familiar starting conditions (more defamiliarized countries). We further show that the intergenerational mobility significantly shapes the attitude towards tax payment only among individuals who claim for independence from their family context (i.e. those showing less family ties). This evidence remarks the importance to foster intergenerational mobility to build a more tax-compliant society.Originality/valueWe revisit the linkage between attitude toward tax compliance and inequality, on the light of the intergenerational labor mobility, that may be seen as the dependence between children's and parents' earnings. Given the insights from the existing studies, this paper represents the first empirical work that aims to analyze the potential relationship between intergenerational mobility and personal attitude toward tax payment across European citizens.

Understanding Tax Morale: A Critical Review of Its Impact on Compliance and Policy

This research aims to analyse tax morale’s effect on compliance, focusing on socioeconomic, cultural, and institutional influences, particularly in developing economies. We utilise a literature review to explore theoretical and empirical insights into tax morale and compliance, assessing the impact of trust, fairness, and governance. Key factors like government trust and fairness perceptions are identified as crucial to tax morale. We also highlight the role of corporate governance in shaping compliance strategies. This study enhances understandings of tax morale’s determinants and compliance implications, offering a theoretical framework for future research. As such, we recommend policy and educational measures to improve tax morale and compliance, emphasising the importance of trust and fairness. However, the review’s scope is limited to available literature, suggesting empirical research is needed to validate these findings further. Keywords: board of directors, determinants of tax morale, tax compliance, tax morale

Analysis of research trends on tax morale in indexed journals in Indonesia

This study aims to analyze the research trends on tax morale in taxation journals indexed in Indonesia from 2019 to 2024. The method used is a systematic literature review by collecting data from various journals accredited by the Science and Technology Index (SINTA). The results show a significant increase in the number of publications discussing tax morale, especially in 2020, influenced by the COVID-19 pandemic. Factors such as trust in the government, social norms, and strict sanctions were found to have a positive impact on tax morale and tax compliance. The study also found that tax morale can be an effective tool for improving tax compliance through a holistic approach, including tax education, tax audits, sanctions, and incentives. This study provides important contributions to the taxation literature by presenting an in-depth analysis of tax morale research trends and their implications for tax policy in Indonesia. These findings are expected to help policymakers design more effective and sustainable taxation strategies.

Оподаткування і фіскальна соціологія: фінансова думка Заходу та уроки для України

Introduction. In the process of fair interaction between authorities and taxpayers, a relationship of trust is created. This trust ensures support for government fiscal initiatives from the business sector. Conversely, if the relationship is not transparent and equitable, it can lead to a passive or even negative attitude towards taxes, thereby reducing the efficiency of the tax system. Problem Statement. There is a gap in Ukrainian fiscal theory, which is still underdeveloped in terms of fiscal sociology. Compared to Western countries, where fiscal sociology has already become an integral part of economic analysis, in Ukraine this issue has been studied only by a narrow circle of scholars. This limitation necessitates a deeper study and integration of sociological approaches into financial science, because without it, Ukrainian researchers and policy makers lose the opportunity to gain a more complete understanding of the interaction between economic and social processes. The purpose is to substantiate the directions of integration of fiscal sociology into Ukrainian financial theory and to develop recommendations for its inclusion into Ukrainian financial practice. Methods. The methods used are systematic, structural-functional, comparative analysis, analogy, grouping, description, comparison and generalization. Results. It is proved that by integrating fiscal sociology, Ukrainian fiscal theory can benefit from a more nuanced understanding of the socio-economic factors influencing fiscal policy. Such integration could lead to more effective policy making and a deeper understanding of the economic challenges facing Ukraine. Conclusions. Ukrainian academics and policymakers should prioritize the interdisciplinary study of fiscal policy, taking into consideration the rich tradition of fiscal sociology in the West. Joint efforts should be made to develop tax policies that strengthen state legitimacy by addressing issues of fairness, transparency, and trust. Strategies for managing public debt and improving tax morale should be a central element of fiscal policy to ensure that Ukraine's financial system can withstand socioeconomic pressures and contribute to long-term stability and development.

Analysis of Tax Compliance Intentions amongst Small Business Owners in Kathmandu Valley: An application of the Theory of Planned Behavior

Governments heavily rely on tax revenue, imposing taxes on incomes, assets, and products of individuals and entities. However, tax compliance remains a global challenge due to complexities, systemic flaws, and taxpayer ignorance. In Nepal, particularly among small business owners, there is a lack of research on tax compliance intentions. This study aims to understand taxpayers' intentions regarding tax compliance, focusing on small business owners in Kathmandu Valley. The Theory of Planned Behavior (TPB) was employed to measure intentions using structured questionnaires and structural equation modeling (SEM) with SPSS and AMOS software. The study surveyed 200 small business owners, revealing that only 48.38% were aware of their tax compliance intentions. Additionally, 61.5% reported difficulties in paying taxes and criticized the government for insufficient tax awareness initiatives. Despite this, 74.74% believed that staying updated with changing government regulations could help manage tax challenges. The SEM results showed significant correlations between tax compliance intentions and factors like tax morale, tax complexity, and trust in the government. Most small businesses were registered and filed taxes annually, yet their compliance intentions were largely influenced by fear of fines. Furthermore, variables such as attitudes toward paying and avoiding taxes, belief in government, and the complexity of tax procedures also impacted compliance. The study concludes that improving tax services, enforcing more effective penalties, enhancing tax morale, and ensuring information transparency are crucial to facilitating tax compliance among small business owners in Nepal.

Tax Morale, Governance Quality And Tax Compliance

This study aims to investigate the relationship between tax morale, governance quality, and tax compliance in Nigeria. The study used the library research approach, which involved examining books, academic journals, and conference papers. According to the evaluation, tax compliance in Nigeria remains below standard, resulting in low tax morale, which is influenced by people's perceptions of government services, a lack of justice, and trust. The study also discovers that tax morale has a significant impact on tax noncompliance, such as a decrease in foreign portfolio equity investment inflows for tax avoidance, self-employed tax payers, and perceptions of higher tax fines and difficulty evading taxes. The study also discovers a favourable link between government quality (excellent governance, views of government accountability and provisions) and tax compliance. Studies have shown a considerable association between tax morale, governance quality, and tax compliance. The study recommends that government put in place efficient and effective tax collection policies, through providing people with accessible ways of paying their taxes, simplifying the process and reduction of taxes imposed on lower income individuals.

Understanding Tax Compliance: The Interplay between Tax Morale, Tax Rates, and Mediating Intentions

Small, and Medium Enterprises(SMEs) play a crucial role in the national economy. The stability of the economy can be maintained through the tax compliance, which contributes significantly to economic stability. This study aims to examine the impact of tax morale and tax rates on tax compliance. Additionally, it investigates the role of taxpayer intention as a mediator between tax morale and tax rates on tax compliance. The research involved 100 SMEs respondents in the DKI Jakarta area and employed quantitative analysis using Smart-PLS as the analytical tool. The results show that tax morale significantly influences both tax intention and tax compliance. However, tax rates do not have a significant impact on tax intention or tax compliance. The role of intention as a mediating variable partially mediates the effect of tax morale on tax compliance, while intention does not mediate the effect of tax rates on tax compliance. This study contributes additional literature on tax compliance and provides practical insights for tax authorities, emphasizing the need to enhance tax morale through effective tax education to motivate taxpayers to fulfill their tax obligations.

The influence of tax knowledge, tax awareness, and tax morality on tax compliance of MSMEs in the Kebon Bawang Urban Village, North Jakarta

This study aims to test and analyze the Influence of Tax Knowledge, Tax Awareness, and Tax Morality on Tax Compliance of MSME Taxpayers residing in the Kebon Bawang Village area, North Jakarta. This research method uses the Nonprobability sampling method using Accidental Sampling and using the Hair formula with a research sample of 100 respondents. The results of this study are (1) Tax knowledge does not have a positive effect on MSME taxpayer compliance. (2) Tax awareness has a positive effect on MSME taxpayer compliance. (3) Tax morality has a positive effect on MSME taxpayer compliance. The conclusion from the study indicates that tax knowledge does not influence SMEs taxpayers' compliance due to the lack of knowledge among SMEs taxpayers about the payment deadlines for their tax obligations.

TAX COMPLIANCE AND MORAL ETHICS DIFFERENCES ACROSS BABY BOOMER II, GENERATION X, MILLENNIALS AND GENERATION Z

This study aims to analyze the differences in tax compliance and tax morality ethics among generations in Indonesia, involving four generational groups: Baby Boomer II, Generation X, Millennials, and Generation Z. The methodology used is quantitative with a survey approach, utilizing questionnaires distributed in Jakarta, Surabaya, and Bekasi. The main findings indicate significant differences in tax compliance and tax morality ethics across generations, where Generation X shows the highest tax compliance and Generation Z has the lowest tax morality ethics. This research provides insights for the government to design more effective tax policies tailored to generational characteristics.

The Effect of Tax Awareness, Tax Understanding, and Tax Morals on Taxpayer Compliance from the Gender Perspective of MSME Entrepreneurs in the Tanah Abang Market

Aims: This study aims to determine the effect of tax awareness, tax understanding, and tax morals on taxpayer compliance from the gender point of view of MSME entrepreneurs. Study Design: The research design used is a survey by distributing questionnaires directly to respondents or MSE taxpayers in the Tanah Abang Market. The sample collection technique used in this study was simple random sampling. Place and Duration of Study: The sample in this study were MSME taxpayers in the Tanah Abang Market as many as 154 male respondents and 116 female respondents. Methodology: Researchers used the Hair et al. formula [1] to determine the number of research samples. The type of data used in this study is quantitative data in the form of values or scores for the answers given by MSME respondents in the Jakarta Tanah Abang Market to the questions in the questionnaire. The data obtained was transferred into data tabulation and analyzed using PLS-SEM (Partial Least Squares Structural Equation Modeling) software version 4.0 to generate a hypothesis of a causal relationship between the independent variables (tax awareness, tax understanding, and tax morale) and the dependent variable (taxpayer compliance). Results: The results of the study are tax awareness, tax understanding, and tax morale have a significant influence on the compliance of male and female taxpayers. Conclusion: From this study, it was found that in combination gender, tax awareness, tax understanding, and tax morale had an effect on taxpayer compliance. However, based on the significance value, it is known that tax awareness and tax understanding of females have a more significant effect on tax compliance than males. This is different from tax morale, based on the significance value, it is known that male tax morale has a more significant effect than female. This is in line with Gender theory which explains the differentiation of roles, positions, responsibilities, and division of labor between men and women determined by society based on the nature of women and men who are considered appropriate in accordance with the norms, customs, beliefs or habits of society [2].

Effectiveness of tax incentives in optimizing corporate income tax revenue: Case study public listed company tax office

Tax revenue is a key component of the Indonesian State Budget (APBN) and plays a strategic role in national development. This study aims to analyze the impact of the implementation of the income tax rate reduction policy and tax incentives based on Law Number 7 of 2021 on Harmonization of Tax Regulations (UU HPP) on corporate income tax revenue at Public Listed Company Tax Office. The research methodology used is qualitative descriptive, with primary data obtained through interviews with tax officials and tax consultants, and secondary data from tax revenue documentation and related literature. The findings show that the reduction in corporate income tax rates and the provision of tax incentives for publicly listed companies significantly impact the optimization of tax revenue at the Public Listed Company Tax Office. The largest contribution to corporate income tax revenue comes from companies listed on the Indonesia Stock Exchange (IDX), with a dominant contribution from companies conducting Initial Public Offerings (IPOs). The study also identifies several factors affecting the optimization of corporate income tax revenue, including tax awareness and corporate tax morale. These findings provide important insights into how tax policies can be optimized to improve taxpayer compliance and tax revenue, as well as their contribution to national economic growth.

Coming clean on your taxes

This paper develops a simple model to explore whether a higher detection probability of tax evaders—e.g., because of improved exchange of information between countries and/or due to digitalization of tax administrations—renders it optimal for governments to introduce a voluntary disclosure program (VDP) and, if so, under what terms. We find that if the VDP is unanticipated, it is likely to be optimal for a revenue-maximizing government to introduce a VDP with relatively generous terms, i.e., a low or even negative penalty. When anticipated, however, the VDP is neither incentive compatible nor optimal, as it induces otherwise compliant taxpayers to evade tax. A VDP can then only be beneficial if tax evasion induces an external social cost beyond the direct revenue foregone, e.g., due to adverse effects on overall tax morale. In contrast to the common view that VDPs should come along with additional enforcement effort, we find that governments should relax enforcement if the VDP itself provides more powerful incentives to come clean.

Patriarchy, economic values, and tax morale in Indonesia

This research aims to examine the influence of patriarchal ideology, economic values, age, gender, marital status, education level, employment status, and religion on the tax morale of Indonesian citizens. This cross-sectional research adopts a quantitative approach and utilizes World Value Survey (WVS) VII data collected in 2017. The respondents to WVS VII were 3,200 (three thousand two hundred) Indonesian citizens who were over 17 (seventeen) years old and spread across several provinces. STATA 17 processed the data and used logistic regression techniques for analysis. Researchers found that only patriarchal ideological orientation, education level, and religion had a significant impact on citizens' tax morale. Only patriarchal ideologies have a negative relationship with citizens’ tax morale. Researchers recommend that the government should intensify mass education on gender justice, enhance the quality of education, and support various religious institutions, particularly Islam, to instill religious values in society.

Pengaruh Money Ethics dan Tax Morale terhadap Persepsi Mahasiswa Mengenai Tax Evasion dengan Hedonisme sebagai Variabel Moderasi

This research raises the issue of the phenomenon of tax evasion amidst the increase in tax revenue realization in the last three years. This study aims to determine the effect of money ethics and tax morale on student perceptions of tax evasion with hedonism as a moderating variable. The object of this research is the cadre of the Mojokerto National Student Movement (GMNI) organization. This study uses a quantitative approach with primary data sources and uses a survey method through google form with a Likert scale measuring instrument. The population in this study were 115 cadres of the Mojokerto GMNI organization. The sampling technique used purposive sampling to get 65 respondents. The data analysis technique uses descriptive statistical analysis with the Structural Equation Modeling- Partial Least Square (SEM-PLS) method. The test tool used is SmartPLS software version 4.1.0.2 with outer model and inner model. The results showed that money ethics has a positive and significant effect on student perceptions of tax evasion, tax morale has a negative and significant effect on student perceptions of tax evasion, and hedonism is able to moderate the influence of money ethics and tax morale on student perceptions of tax evasion.

Non-sanction sources of an effective fiscal system interms of tax compliance: tax morale and mentality, taxjustice, trust in the tax apparatus and its activities

The article presents the results of the author’s empirical social research on non-sanction sources of tax complianceof a natural person (an individual taxpayer). This concept is understood as conscious and intentional compliancewith tax law and meeting the requirements of tax law. The fundamental assumption is the discovery,proven by behavioral economics, that in a tax state under democratic conditions, people pay taxes not only becauseof state compulsion. A fiscal system that is effective in terms of tax compliance is a system in which as manytaxpayers as possible consciously and intentionally comply with tax law and meet the requirements of tax law.The article presents the level of tax compliance among adult Poles as well as the level of forced and voluntarycompliance determined in our own empirical research. Then, the following non-sanction determinants of a citizen’swillingness to make tax payments were presented: tax morale, lack of experience of unintentional tax error, attitudetowards tax compliance, religiosity, tax mentality, perception of the structure of taxes as fair, perception of thefunctioning of the tax apparatus for the common good, trust in the tax apparatus.

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.

Citizen profiles based on social capital in the Spanish fiscal context: Profile development and multivariate consistency analysis

Previous studies have established that social capital plays a significant role in individual tax-related behaviors, including inclinations toward tax evasion and compliance. This study seeks to extend the understanding of tax morale in Spain using data from the Public Opinion and Fiscal Policy Survey (CIS, Study 3332). We use factor analysis with maximum likelihood extraction and Varimax rotation to identify key social capital variables and tax attitudes. We identify profiles based on their social capital and tax compliance using cluster analysis. We will apply hierarchical clustering with Ward's chaining and k-means clustering. The robustness of the resulting profiles will be confirmed by discriminant analysis and a multilayer perceptron neural network, which will look for higher rates of correct classification as an indicator of improved profile consistency. Our findings suggest that identifying Spanish tax citizens' profiles helps analyze social capital in tax policy. After our analysis, we have determined that enhancing the accumulation of social capital variables leads to better tax adherence.

Post-COVID economic crisis, citizen-state relations, and the Electronic Transactions Levy (E-levy) controversy in Ghana

In 2021, the Government of Ghana sparked controversy by introducing the Electronic Transactions Levy (E-Levy) as part of an aggressive programme of revenue mobilisation in response to the debt-induced economic crisis that swept through the Global South in the wake of the COVID-19 pandemic. This paper contributes to the literature on the politics of economic crisis by demonstrating the consequences of prioritising revenue mobilisation over social protection during times of economic shocks. Drawing on in-depth interviews with a range of respondents, we argue that the outrage triggered by the introduction of the E-levy was rooted in longstanding grievances against the lack of reciprocity in citizen-state relations and an apparent breakdown of the fiscal contract. The tax provoked denunciatory narratives of economic mismanagement and government insensitivity, thereby underscoring the crisis of political legtimacy in Ghana. By ‘loosening the safety net’ and ‘tightening the tax net’ at a time when the country was battling an economic crisis and still grappling with the fallouts of the COVID-19 pandemic, the government created the conditions that exacerbated the already fraught citizen-state relations. Given the low tax morale, citizens are actively adopting various strategies to avoid paying the tax, including reverting to the use of cash and reducing the value and frequency of transactions.

FAKTOR YANG MEMPENGARUHI KEPATUHAN WAJIB PAJAK UMKM DI KELURAHAN KELAPA GADING TIMUR

This study aims to analyze how the role of tax socialization, tax morality, and perceptions of justice on the compliance of MSME taxpayers in Kelapa Gading Timur Village. The method chosen in this research is non-probability sampling and purposive sampling method. The valid data sample is 100 respondents. The results of data collection processed by Microsoft Excel 2013 and the SPSS program (Statistical Product and Service Solution) 25. The results of the research carried out show that partially taxation socialization, tax morality, and perceptions of justice have a positive and significant effect on taxpayer compliance. The implication of this research is the need to increase socialization for MSME taxpayers regarding the importance of taxation, where there are still many taxpayers who do not understand and understand their tax obligations.