The Effect of Tax Moral on Sales Tax Compliance among Jordanian SME

Alshira’h, Ahmad Farhan; Jabbar, Hijattulah Abdul; Samsudin, Rose Shamsiah

doi:10.6007/ijarafms/v9-i1/5722

Cited by 9 publications

(7 citation statements)

References 64 publications

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“…First, the study establishes evidence concerning sales tax compliance and, as such, helps to reduce the literature gap dedicated to sales tax compliance. For example, according to Alshira'h et al, 2019 andAlm andEl-Ganainy (2013), studies on sales tax are few and far between in relationship to sales tax diffusion as a basic revenue mechanism in the majority of governments. Indeed, no study to date has been directed towards the analysis of sales tax compliance practiced in Middle Eastern and Arab countries.…”

Section: Introductionmentioning

confidence: 99%

Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence

Alshira’h

AL-Shatnawi

Al-Okaily

et al. 2020

EMJB

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PurposeThe 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.Design/methodology/approachThis 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.FindingsThis 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.Practical implicationsTax 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.Originality/valueVery 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

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Section: Introductionmentioning

confidence: 99%

Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence

Alshira’h

AL-Shatnawi

Al-Okaily

et al. 2020

EMJB

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“…Alshira'h A. et al [20] found a positive relationship between the tax morality of SMEs and sales tax compliance.…”

Section: Research On the Influence Of The Size Of The Business On Tax...mentioning

confidence: 99%

The Impact of the Size of Enterprises on Tax Evasion in the Forestry Industry of Russia

Labunets¹,

Mayburov²

2022

JTR

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The problem of low tax revenues and a large shadow sector is relevant to many countries and industries, and the forestry industry in Russia is no exception. This study examines the forms of tax evasion in various segments of the forestry industry to evaluate the impact of the size of businesses and the level of tax audit risk on the frequency of same-type tax responses. The hypothesis is that same-type tax responses in the form of tax evasion are observed in businesses of all sizes of the forestry industry. The frequency of these tax responses correlates with the level of tax audit risk. The representative sample of micro-, small and mid-sized businesses comprises 7,910 enterprises. For each enterprise included in the sample we calculated the level of tax audit risk for the period of 2017-2020. Audit risk was calculated as a cumulative indicator of the incidence of non-compliance, which was detected by comparing the calculated and normative values of the criteria described in the Federal Tax Service’s Concept of the System of Planning of On-Site Tax Audits. The study found that the businesses of all sizes from all sectors of the forestry industry resorted to tax evasion. The specific forms and structural elements of their responses were described. The correlation and regression analysis has shown that there is a strong direct relationship between the level of tax audit risk and the frequency of same-type tax responses. The occurrence of same-type tax responses points to the weaker impact of economic factors within the traditional model of tax behaviour. These findings can be of interest to the tax authorities and policy-makers seeking to raise tax revenues collected from enterprises of the Russian forestry industry.

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“…Estimates of tax non-compliance grew from JD 1,067.4m in 2011 to JD 1,578.2m in 2015, indicating an increase of about 48%. Sales tax noncompliance represented about 71% of the total tax evasion (Jordan Economic and Social Council, 2014;Jordan Independent Economic Watch, 2014), indicating that sales tax non-compliance persists as a main problem in Jordan (Alshira 'h, et al, 2019;Malkawi and Haloush, 2008).…”

Section: Role Of Patriotism 389mentioning

confidence: 99%

Moderating role of patriotism on sales tax compliance among Jordanian SMEs

Alshira’h

Abdul-Jabbar

2020

IMEFM

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Purpose The purpose of this paper is to investigate the impact of tax audit, tax rate and tax penalty on sales tax compliance and examine the moderating effect of patriotism on the associations between tax audit, tax rate and tax penalty with sales tax compliance among Jordanian manufacturing small- and medium-sized enterprises (SMEs). Design/methodology/approach In this study, 660 questionnaires were distributed by using systematic random sampling to manufacturing SMEs in Jordan, after which a total of 385 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS-SEM) was used to validate the measurement model and structural model and the predictive relevance of the study’s model. Findings The findings showed that tax audit and tax penalty were positively associated with the level of sales tax compliance, whereas tax rate was insignificantly associated with sales tax compliance. They also demonstrated the moderating significant effect of patriotism on the relationship between tax penalty, tax audit and tax rate with sales tax compliance. Research limitations/implications 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 eligible SMEs to comply to further boost their sales collections. Originality/value This study extends the deterrence theory in the context of sales tax compliance by proposing the moderating effect of patriotism in the deterrence theory on sales tax compliance among SMEs. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the extended deterrence theory with patriotism as a moderating variable as well as its implications for theory and practice was also discussed.

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The Effect of Tax Moral on Sales Tax Compliance among Jordanian SME

Cited by 9 publications

References 64 publications

Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence

Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence

The Impact of the Size of Enterprises on Tax Evasion in the Forestry Industry of Russia

Moderating role of patriotism on sales tax compliance among Jordanian SMEs

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