The Determinants of Tax Morale and Tax Compliance: Evidence from Jordan

Abstract

This paper investigates how individuals determine their tax morale levels and tax compliance decisions. Using a questionnaire survey and a multivariate tests procedure, the paper revealed that tax evasion is morally acceptable in Jordan under some circumstances, indeed there could be an affirmative duty to evade taxes since the government is perceived to be highly corrupted. The findings also show that while the extent of the governmental corruption has a positive (negative) effect on tax non-compliance (tax morale), the efficient expenditure of governmental tax revenues has a negative (positive) impact on tax non-compliance (tax morale). The individuals’ tax non-compliance decisions are likewise positively affected by the tax rates and by the taxation system’s being perceived as unjust, but decline with the increase of audit rates and the subsequent penalty rates. The degree and effectiveness of these determinants are dependent on the individual’s level of risk aversion, financial constraints and the surrounding referent groups. The results also confirm that individual factors play a significant role in determining the level of tax morale. Overall, the tax morale level and the compliance decision of an individual are greatly influenced by gender, age, educational level, occupational status and religious background.

Citation

Alasfour, F., Samy, M. and Bampton, R. (2016), "The Determinants of Tax Morale and Tax Compliance: Evidence from Jordan", Advances in Taxation (Advances in Taxation, Vol. 23), Emerald Group Publishing Limited, Leeds, pp. 125-171. https://doi.org/10.1108/S1058-749720160000023005