A Socio-Economic Model of Sales Tax Compliance

Abstract

Tax compliance is an issue that can be traced back to the introduction of taxes, which is the reason such compliance remains a significant topic in the current literature of academia and practice. Prior studies on the topic of tax compliance or non-compliance can be categorized into two, namely economic and social/psychological theories. In a more serious note, tax evasion has remained a key issue among governments all over the globe, with Jordan being no exception. Jordan has undertaken different fiscal measures to increase compliance in the domestic front in the past decades, but based on annual reports, the country is still experiencing a considerable increase in net public debt and fiscal deficit that can be traced back to the increased tax non-compliance rate. This is specifically true in the case of sales tax in Jordan. To compound the matter further, literature concerning the determinants of sales tax compliance as well as other determinants that drive non-compliance is still scarce, with a universal tax compliance model able to explain the issue with clarity still being elusive. Hence, this work proposed the determinants of sales tax compliance in the context of small and medium-sized enterprises (SMEs) in Jordan, extending Fischer’s model of tax compliance, and adding the moderating role of tax knowledge and direct effect of tax service quality. This study proposed a model encapsulating the social, psychological and economic factors to provide insight into the sales tax compliance of Jordanian SMEs.

Exposure Detection Applications Acceptance: The Case of COVID-19

“…The developed framework was tested using partial least squares (PLS), with SEM enabling the simultaneous examination of the measurement and structural models [ 122 , 123 , 124 ]. PLS is also effective when dealing with complicated models, characterised by a hierarchical structure, several indicators, relationships, and constructs [ 125 , 126 , 127 , 128 ].…”

Factors Influencing the Adoption of Big Data Analytics in the Digital Transformation Era: Case Study of Jordanian SMEs

“…PLS-SEM is a multivariate statistical approach that permits for the simultaneous estimate of multiple associations between one or several exogenous constructs and one or several endogenous constructs in a single model. This modelling technique also works efficiently and allows analyzing complex models, containing moderating or even mediating relationships variables, and with relatively smaller sampling sizes [83,[89][90][91][92]. Based on the abovementioned explanations, we employed PLS-SEM techniques for testing the posited hypotheses to analyze the data collected.…”

Evaluating the D&M IS Success Model in the Context of Accounting Information System and Sustainable Decision Making

“…Similarly, AIS was defined by Nguyen and Nguyen [20] as a set of activities, documents and technology that interdependently work together to gather, process and report information to internal and external stakeholders in order to reach informed decisions in organizations. AIS primarily works towards recording events/transactions and producing information to evaluate performance, as well as providing a complete gathering and reporting financial transaction process [21]. AIS also covers a combination of computer-based and information technology related resources for tracking and reporting accounting activities.…”