The Association Between Vertical Equity and Presidential Voting Behavior and Taxpayers’ Compliance

Advancing the institutional perspective on informal entrepreneurship: a study of formalization intentions among street entrepreneurs

“…The procedural justice literature demonstrates that people's reaction to their experiences with public authorities is rooted in their evaluation of the fairness, trustworthiness, interpersonal respect and impartiality of the procedures used by those agencies to exercise their authority (Murphy et al, 2016). The literature on tax compliance (Feld and Frey, 2002;Farrar et al, 2021) and informal entrepreneurship in general (Molero and Pujol, 2012;, has suggested that the taxpayers and entrepreneurs who perceive decisions enacted by the tax and other public authorities as high in procedural justice show, as a result, an increased willingness to voluntary compliance with tax regulations and other related laws. In addition to procedural justice, redistributive justice also seems to have a strong correlation with the level of informality and compliance.…”

“…, 2016). The literature on tax compliance (Feld and Frey, 2002; Farrar et al. , 2021) and informal entrepreneurship in general (Molero and Pujol, 2012; Williams and Shahid, 2016), has suggested that the taxpayers and entrepreneurs who perceive decisions enacted by the tax and other public authorities as high in procedural justice show, as a result, an increased willingness to voluntary compliance with tax regulations and other related laws.…”

Tax equity perceptions, compliance intention and compliance behaviour among small and medium enterprises in Ghana

“…Tax avoidance, on the other hand, is the legal practice of taking advantage of gaps in the tax code to reduce one's tax liability, while tax evasion is the wilful non-payment of tax as it is due (Atawodi et al, 2012). To ensure tax compliance, the taxpayer ought to perceive the tax system as equitable (Farrar et al, 2020). Tax equity (horizontal, vertical and exchange) and other intervening phenomena like tax knowledge, compliance intention and compliance behaviour have been discussed by Margaretha et al (2020); Azemi et al (2020); Abdul et al (2020); Bayram et al, (2017); Thomas, (2012) Efebera et al, (2004) & as a strategic policy direction to boost tax revenue.…”

“…Policymakers and tax authorities use the equity in taxation as a guiding principle in drafting detailed income tax legislation (Farrar et al, 2020). Therefore, theorists must treat all those in the same or similar income brackets the same way (horizontal equity) but individuals in different income brackets are treated differently (vertical equity) when formulating tax policies.…”

“…Vertical equity, which is sometimes referred to as progressive taxation, means that a taxpayer with a higher income should pay a higher percentage of tax compared to a person with a lower income, while horizontal equity requires that taxpayers with the same or similar income should pay an equivalent amount of tax. (Farrar et al, 2020;Efebera et al, 2004, quoted by Taing & Chang, 2021. From both the vertical and horizontal perspective, tax equity has a significant role in promoting tax compliance, especially among self-employed entrepreneurs (Farrar et al, 2020, Efebera et al, 2004.…”