Evaluating the individual- and country-level variations in tax morale

Abstract

PurposeRecently, a small but burgeoning literature has argued that tax non-compliance cannot be fully explained using the conventional rational economic actor approach which views non-compliance as occurring when the pay-off is greater than the expected cost of being caught and punished. Instead, a social actor approach has emerged which views tax non-compliance as higher when 'tax morale', defined as the intrinsic motivation to pay taxes, is low. To advance this social actor model, the aim of this paper is to evaluate the individual and national heterogeneity in tax morale, which is crucial if tax compliance is to be improved. MethodologyTo do this, we report data from the 2010 Life in Transition Survey (LiTS) on tax morale in 35 Eurasian countries. FindingsLogit econometric analysis reveals on the one hand, that there is higher tax morale among middle-aged, married, home owners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure. Research implications2 Rather than continue with the rational actor approach, this paper reveals how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance. Practical implicationsThese results display the specific populations with low tax morale which need targeting when seeking to tackle tax non-compliance. Originality/valueThis paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.

Explaining individual- and country-level variations in unregistered employment using a multi-level model: evidence from 35 Eurasian countries

“…including the influence of tax morale (as a proxy indicator of the degree of institutional asymmetry), which is becoming a very popular strand in recent research (Krasniqi and Desai 2016;Williams and Krasniqi 2017, Williams and Martínez 2014, Williams and Horodnic 2017b.…”

“…To evaluate these hypotheses in relation to Eurasian countries, data is here reported from the second round of the Life in Transition Survey (LiTS II), conducted jointly by the World Bank and the European Bank for Reconstruction and Development (EBRD) in 2010 (for details see EBRD 2011; Williams and Krasniqi 2017). The survey covers 35 Eurasian countries with varying degrees of economic development, including transition and developed economies 1 .…”

Tax Ethics and Tax Evasion, Evidence from Greece

“…recent survey, in which data was collected from 35 Eurasian countries, tax ethics is higher in rich countries, in countries which have increased public revenues and expenditures, in countries with a fair and clear legal system and in countries with a low level of social inequality and corruption.Moreover, citizens of higher education and citizens with children have a higher sense of tax compliance[13].…”

Influencia del Compromiso y las Normas Sociales en la Intención del Cumplimiento Tributario

“…En la posición opuesta, uno de los factores sociales que puede ayudar a explicar mejor el incumplimiento tributario (Williams y Krasniqi, 2017) es que no hay relación entre norma social y cumplimiento tributario (Wenzel, 2004). La norma social, por su parte, se define sobre la base de directrices compartidas de comportamiento apropiado y aceptado por un colectivo, determina reglas o estándares que son asumidos por los miembros del grupo a quienes guía o restringe pero, sin la fuerza de la ley (Cialdini y Trost 1998, p. 152;citado por Bobek et al, 2013), pudiendo derivar de intereses, valores y actitudes particulares propias del grupo social.…”

“…La norma social, por su parte, se define sobre la base de directrices compartidas de comportamiento apropiado y aceptado por un colectivo, determina reglas o estándares que son asumidos por los miembros del grupo a quienes guía o restringe pero, sin la fuerza de la ley (Cialdini y Trost 1998, p. 152;citado por Bobek et al, 2013), pudiendo derivar de intereses, valores y actitudes particulares propias del grupo social. Desde la perspectiva de la norma social, ésta regula desde la cultura el grado de rechazo o de aceptación de conductas (Kogler et al, 2015), en consecuencia, la aceptación de los individuos dentro de un grupo social afecta el cumplimiento tributario y es mayor cuando existe motivación intrínseca (Williams y Krasniqi, 2017) la cual se determina por parámetros de costumbre social y motivaciones colectivas que dan sentido a valores personales y normas sociales (De Backer et al, 2015) e inciden en las decisiones de cumplimiento de los contribuyentes (Bobek et al, 2013).…”