Assessing Tax Compliance Behavior Among Romanian Taxpayers: An Empirical Case Study

Abstract

This study explores how different factors affect tax compliance behavior among Romanian individual taxpayers. By unpacking tax compliance into nine drivers—tax system fairness, trust in government and tax authorities, efficiency, and transparency of government spending, knowledge of tax legislation, tax legislation simplicity, personal financial constraints, personal ethics, and moral standards, the social environment, and coercive measures—this study develops clear-cut paths of the drivers of tax compliance from the perspective of a developing country. The proposed research hypotheses were tested with a sample of 402 individual taxpayers and quantitative data analysis was carried out using partial least squares-structural equation modeling. The results showed that seven drivers (tax system fairness, trust in government and tax authorities, knowledge of tax legislation, personal financial constraints, coercive measures, moral standards, and tax legislation simplicity) were significant factors that increase the likelihood of tax compliance among individual taxpayers. Our findings are expected to provide tax authorities and governments new insights on tax compliance behavior that enable them to develop fiscal methods, strategies, policies, and legal measures tailored to local context, and constraints.

Modelling the Impact of VAT Fiscality on Branch-Level Performance in the Construction Industry—Evidence from Romania

“…In the context of the challenges posed by rapid economic and social transformations, globalization, digitization, and other factors outlined by Trifan et al (Trifan et al 2023), governments globally are compelled to enhance the efficiency of fiscal systems. This involves implementing new tax collection techniques and utilizing fiscal resources effectively on a global scale (Cirman et al 2022;Pop and Pelau 2017).…”

Development and Validation of a Managerial Model to Understand Taxpayers’ Attitudes and Perceptions Towards Tax Compliance

“…According to Feld and Frey (2007) and Trifan et al (2023) the interactions among citizens and tax authorities must be based on a "psychological contract" characterized by a relationship of collaboration, mutual benefits, and expectations. On the one hand, tax authorities need to encourage and trust citizens' civic sense to be fair, and on the other hand, citizens want respect from authorities as well as the exclusion of suspicions of tax evasion (Franzoni, 2000).…”

“…The word "trust" is of particular importance in the tax compliance process, meaning the trust of taxpayers that everyone pays the correct amount in the form of tax, as well as the trust of taxpayers that their money is used correctly by the administration (Feld and Frey, 2002). The study conducted by Kirchler, Hoelzl and Wahl (2008) and Trifan et al (2023) demonstrates a direct relationship between taxpayers' trust in the tax authorities and compliance with tax payment responsibilities, and the factors of perceived fairness and procedural justice. This implies that taxpayers are aware of the importance of their payments and obtaining benefits from the government; perceive and observe the efficiency of spending public funds; and are treated by the authorities with respect, not as evasives (Remeikiene et According to Pull Imposed Compliance, the payment of tax obligations comes as a response from the tax payers to the action of the tax authorities.…”