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Relationship Between Tax Compliance Internationally and Selected Determinants of Tax Morale

22 Pages Posted: 5 Jan 2004  

Ahmed Riahi-Belkaoui

University of Illinois at Chicago - Department of Accounting

Abstract

Tax compliance has been studied by analyzing the individual decision of a representative person between planning and evading taxes. A neglected aspect of tax compliance is the impact of a social contract on tax morale. Such implicit contract between the individual and the state guaranteeing a high level of economic freedom, effective competition laws, an important equity market and moral norms, is hypothesized to have a positive impact on tax compliance. In this paper, empirical evidence based on data from 30 countries indicate that tax compliance internationally is positively related to the level of economic freedom, the level of importance of the equity market and the effectiveness of competition laws and negatively related to crime rate as a proxy for moral norms.

Keywords: Tax compliance, social contract, tax morale, economic freedom, effective competion laws, moral norms.

JEL Classification: H24, H26, M41

Suggested Citation

Riahi-Belkaoui, Ahmed, Relationship Between Tax Compliance Internationally and Selected Determinants of Tax Morale. Available at SSRN: https://ssrn.com/abstract=484022 or http://dx.doi.org/10.2139/ssrn.484022

Ahmed Riahi-Belkaoui (Contact Author)

University of Illinois at Chicago - Department of Accounting ( email )

601 South Morgan Street
University Hall, Room 2303
Chicago, IL 60607
United States
312-996-4400 (Phone)
312-996-4520 (Fax)

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