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Tax compliance involves complying with the tax rules and regulation, which encompasses the filing, reporting and payment of tax. The two aspects of tax non-compliance are…
Tax compliance involves complying with the tax rules and regulation, which encompasses the filing, reporting and payment of tax. The two aspects of tax non-compliance are tax evasion and tax avoidance. While the ethicality of tax evasion as an illegal act of reducing tax is clear, the consensus regarding the morality of tax avoidance as a legal act of minimizing tax is mixed. This chapter will discuss the ethical perspective of tax (non)compliance.
We approach this topic by discussing the two important terms of tax non-compliance namely tax evasion and tax avoidance from the ethical point of view. The tax evasion and tax avoidance were critically evaluated to justify whether it is ethical or not. The tax non-compliance is also associated to the corporate governance which if do effectively help to protect the interest of larger stakeholder.
In a nutshell, tax non-compliance such as tax avoidance and tax evasion is unethical act and these acts of non-compliance go against the spirit of contemporary corporate governance which sought to protect the interest of the stakeholders.
Tax non-compliance could enhance shareholders wealth (in terms of reduced tax); it affects the distribution of wealth (public benefits financed by tax revenues) among the society at large as another stakeholder affected by such act. Future research may be conduct to investigate this to the larger sample.
Firms should avoid engaging in non-compliance activities such as engaging in tax evasion and aggressive tax avoidance as part of its social obligation to the society in line with the spirit espoused in the contemporary corporate governance.
This paper argues that tax non-compliance is unethical and highlights the importance of having efficient corporate governance for larger stakeholder’s interest.
Tax revenues are becoming one of the crucial tax policy segments in developing countries. Governments intend to collect more funds in the budget. The study aimed to…
Tax revenues are becoming one of the crucial tax policy segments in developing countries. Governments intend to collect more funds in the budget. The study aimed to identify the dimensions and factors influencing tax compliance in Iranian professional football players.
Based on interpretive structural modelling (ISM), the required information was collected using a literature review and a pairwise comparison questionnaire from eleven sport academic and executive participants. Content validity index of the questionnaire was >0.7 and its inconsistency index was <0.1.
The influential factors put in six levels. Results showed “new technologies for implementing regulations” and “clear tax regulations” were the lowest level's most independent factors. Simultaneously, the “possibility of identifying violating taxpayers” and “transparency of the clubs' financial data” were the most dependent factors at the model's first level. Moreover, “legal” was the greatest, and “technological” dimensions had at least importance, and the “amount and manner of fines” was the influential factor. The findings can use for policymaking to improve the professional player's and society tax compliance.
The authors identified the most independent, dependent, influential and minor essential football players' tax compliance factors and the relations between these factors. Recognising each of the factors' role and level of importance can help governments and policymakers in tax legislation in sport.
Virtually all of the completed research to date shows that taxpayer compliance costs are large and generally a multiple of the revenue authority’s administrative costs…
Virtually all of the completed research to date shows that taxpayer compliance costs are large and generally a multiple of the revenue authority’s administrative costs. Compliance costs have also been found to be capricious in their incidence and generally highly regressive. On the other hand, for some taxes (eg. Employer PAYE deductions), much of the research shows that larger firms derive a net economic benefit from enhanced cash flows. There is also perceived to be a fair correlation between high compliance costs and high non‐compliance. These findings and perceptions have led to government pressure in most developed countries to reduce compliance costs. This paper explores the likely impact of compliance costs in the UK as income tax self‐assessment is introduced, leaning on evidence from Australia, where self‐assessment is the standard.
This chapter investigates the effects of the corporate sector on the effectiveness of selected tax compliance instruments in the context of large corporate taxpayers…
This chapter investigates the effects of the corporate sector on the effectiveness of selected tax compliance instruments in the context of large corporate taxpayers belonging to the finance, manufacturing, and service sectors. Applying multilevel logit models based on real tax office and survey data from Bangladesh, it is found that the filing compliance of large corporate taxpayers is influenced by penalty, tax audit, and taxpayer services, while reporting compliance is influenced by tax audit, criminal prosecution, and tax simplification. In the case of payment compliance, two coercive instruments – penalty and tax audit – have been found to be statistically significant. However, when sector characteristics are considered, the extent of the influence of these instruments, and, in some cases, their statistical significance changes. This suggests that the effectiveness of tax compliance instruments, among other things, largely depends on the sector affiliation of corporate taxpayers. Overall, this study establishes that corporate sector plays an important role in the effectiveness of tax compliance instruments, with the caveat that findings might be different if working definitions of the study variables were measured differently.
This brief paper discusses the relevance of conducting surveys that measure individuals’ attitudes for understanding fiscal behaviour. While many surveys assess…
This brief paper discusses the relevance of conducting surveys that measure individuals’ attitudes for understanding fiscal behaviour. While many surveys assess individuals’ attitudes towards paying taxes (e.g. by asking them to what extent they believe tax evasion is ever justified), it is less clear whether individuals’ responses to such survey questions are indicative of the way they would behave in reality. The paper presents a discussion of the way attitudes have been assessed in tax surveys and assesses existing evidence to support a link between these attitude measures and actual compliance behaviour. The paper suggests several avenues to improve the predictive value of attitude measures, such as increasing the specificity of measures, using evaluation scales or mitigating social desirability biases. A series of recommendations are made for measuring attitudes and interpreting attitude surveys for the use of researchers planning to conduct survey work, as well as for the use of findings from taxpayer surveys in the design of tax policy and administration.
This study examines the determinants of enforced tax compliance behavior of Malaysian citizens where trust in tax authorities is assumed to be a mediator. Quota sampling…
This study examines the determinants of enforced tax compliance behavior of Malaysian citizens where trust in tax authorities is assumed to be a mediator. Quota sampling method was used to select a sample of 340 participants to participate in a survey. A two-step structural equation modeling (SEM) process was adopted to test a framework comprising 13 hypotheses. Model fit was initially measured using confirmatory factor analysis (CFA) while model specification was applied in the second stage to test the structural relationship. The mediating effects of trust in tax authorities were tested via Baron and Kenny (1986) approach, bootstrapping, and AMOS AxB estimand. The findings confirmed that trust in government, trust in tax administrator, power of Inland Revenue Board of Malaysia, and awareness influence enforced compliance. However, tax morale and tax amoral behaviors do not influence enforced compliance. The findings suggest that citizens would fulfill their tax responsibilities if they believe that tax authorities are effective in tax administration. Trust in government fosters trust in the tax authorities. This study contributes to existing literature by confirming the factors that affect enforced tax compliance.
This paper investigates how individuals determine their tax morale levels and tax compliance decisions. Using a questionnaire survey and a multivariate tests procedure…
This paper investigates how individuals determine their tax morale levels and tax compliance decisions. Using a questionnaire survey and a multivariate tests procedure, the paper revealed that tax evasion is morally acceptable in Jordan under some circumstances, indeed there could be an affirmative duty to evade taxes since the government is perceived to be highly corrupted. The findings also show that while the extent of the governmental corruption has a positive (negative) effect on tax non-compliance (tax morale), the efficient expenditure of governmental tax revenues has a negative (positive) impact on tax non-compliance (tax morale). The individuals’ tax non-compliance decisions are likewise positively affected by the tax rates and by the taxation system’s being perceived as unjust, but decline with the increase of audit rates and the subsequent penalty rates. The degree and effectiveness of these determinants are dependent on the individual’s level of risk aversion, financial constraints and the surrounding referent groups. The results also confirm that individual factors play a significant role in determining the level of tax morale. Overall, the tax morale level and the compliance decision of an individual are greatly influenced by gender, age, educational level, occupational status and religious background.
Most governments around the world rely heavily on tax revenue to fund not only their recurrent expenditure but also their long-term development goals. There is some…
Most governments around the world rely heavily on tax revenue to fund not only their recurrent expenditure but also their long-term development goals. There is some evidence suggesting that tax evasion in Vietnam has, over the years, been on the rise in terms of number, scale and degree of sophistication. It may thus be beneficial to understand the extent to which various relevant psychological factors interact to influence the tax compliance of Vietnamese taxpayers. This chapter attempts to quantify the effects of taxpayer's emotion, trust and perception on their tax compliance in Vietnam. It adopts a positivist research framework, a quantitative research method and primary data collection. First, a simple, theoretical model in which emotion and trust affect tax compliance both directly and indirectly through perception as a mediating variable, is constructed. The Baron−Kenny method is then applied to the data collected from an e-survey to test various hypotheses derived from the devised theoretical model. The results show that taxpayer's perception positively and significantly influences tax compliance whereas emotion and trust exert significant and positive effects on tax compliance both directly and indirectly (via perception). The findings suggest that voluntary tax compliance in Vietnam can be improved through better tax administration services, more fiscal policy accountability and pro-active tax socialization.
The purpose of this study is to better understand the issues on tax compliance. This study aims to examine the influence of patriotism and public governance on the sales…
The purpose of this study is to better understand the issues on tax compliance. This study aims to examine the influence of patriotism and public governance on the sales tax compliance of small and medium enterprises (SMEs) and to examine the interaction between patriotism and public governance on sales tax compliance.
This study was carried out by soliciting the opinions of owner-managers of SMEs in Jordan through a survey that was distributed by self-administered. This paper uses partial least squares structural equation modelling to investigate the influence of patriotism, public governance and the interaction of these two mechanisms on sales tax compliance for a sample of 385 SMEs.
This paper finds that patriotism and the public governance increase and improve the level of sales tax compliance. The findings also supported the interaction effect of patriotism on the relationship between public governance with sales tax compliance. Thus, all the hypothesised relationships were supported.
Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan, may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen the compliance of eligible SMEs to further boost their sales collections.
Very few studies have examined the determinants of sales tax compliance, and there has been an absence of work that examines the influence of the patriotism and public governance on sales tax compliance. This paper, therefore, fills a gap in the literature by providing the first empirical evidence about the influence of patriotism and public governance on sales tax compliance of SMEs in developing countries. This study is the initial paper to examine the interaction between patriotism and public governance on sales tax compliance among SMEs in developing countries