How do Institutional, Social, and Individual Factors Shape Tax Compliance Behavior? Evidence from 14 Eastern European Countries

28 Pages Posted: 23 Aug 2016

Date Written: August 18, 2016

Abstract

This paper uses micro-level data from a nationally representative survey of 22,000 individuals in 14 Eastern European countries to investigate the effects of institutional, social, and individual factors on taxpayers’ perceptions of power, motivations to comply, and non-compliant behaviors. The results indicate that institutional, social, and individual aspects shape taxpayer behavior: attitudes of peers, individual compliance norms, and the tax burden impact on non-compliance. Moreover, I find several effects of the subjective appraisal of the interaction with tax administrations. Positive experiences strengthen perceptions of power and intrinsic motivations to comply. They also increase the propensity to report non-compliant behavior in the past, suggesting educational effects of taxpayer services and tax audits.

Keywords: Tax compliance behavior, enforcement, fairness, peer norms, taxpayer services

JEL Classification: C83, H26

Suggested Citation

Kasper, Matthias, How do Institutional, Social, and Individual Factors Shape Tax Compliance Behavior? Evidence from 14 Eastern European Countries (August 18, 2016). WU International Taxation Research Paper Series No. 2016-04. Available at SSRN: https://ssrn.com/abstract=2825994 or http://dx.doi.org/10.2139/ssrn.2825994

Matthias Kasper (Contact Author)

University of Vienna

Universitätsstraße 7
Vienna, Vienna 1010
Austria

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