Antecedents of taxpayers’ intentions to engage in tax evasion: evidence from Barbados

Abstract

Purpose Tax evasion has been a major problem for governments around the world, with innovative and ever-changing schemes making the practice increasingly difficult to regulate. In light of this, this study aims to use the extended version of the theory of planned behaviour (TPB) (Beck and Ajzen, 1991) to predict individuals’ intentions to engage in tax evasion. Design/methodology/approach The research adopts a two-stage approach for data collection and analysis. First, the authors obtained survey data from 150 taxpayers in Barbados to conduct multivariate analyses to test the validity of the study’s hypotheses. The authors also used several open-ended questions on the survey instrument to conduct thematic analyses to further explore the influence of the antecedents of intentions to engage in tax evasion. Second, the authors conducted a focus group with two tax officials and three tax advisors. Findings The authors find that attitudes toward the behaviour, perceived behavioural control and moral obligation are significant predictors of intentions to engage in tax evasion. Factors cited as encouraging tax evasion are perceived fairness, tax authorities’ institutional infrastructure and responses, potential financial benefit, perceptions of inequality, low level of trust in tax authorities, perceived poor use of tax revenues and poor treatment of taxpayers. Conversely, factors cited as discouraging tax evasion include fear of prosecution, high morals and potential adequate governmental regulation. Research limitations/implications The study measures intentions to engage in tax evasion rather than actual behaviour. The study does not measure social desirability bias. Originality/value This paper tests the applicability of variables used in the extended version of the TPB to predict intentions to engage in tax evasion in a Caribbean-based emerging economy. It also applies a mixed-methods approach of collecting data from taxpayers, tax advisors and tax officials.

The Examination of Tax Evasion Behavior of Tax Payers from The Perspective of Planned Behavior Theory

“…Results of the studies done by Wenzel (2004), Cullis and Savoia (2011) and Alleyne et al (2017) show that subjective norm does not influence taxpayer's obedience. The results of studies by Purbo (2011) and Bobek and Hatfield ( 2003) also show that subjective norm has a positive and significant effect on taxpayer's obedience.…”

Factors Influencing Taxpayers Engaged in Tax Evasion Evidence From Woldia City Administration Micro, Small and Large Enterprise Taxpayers

“…The stakeholders, government experts, families, individuals, groups, and peers influence taxpayers whether they engaged in tax evasion or not (Harris et al,2017). The stakeholders around the taxpayers might be motivators to push taxpayers in the criminal act of tax evasion.…”

“…Attitude a means to evaluating the activities whether they are positive or negative of any object. Many studies have been done by different scholars by defining and identifying the relationship between the attitudes of taxpayers with tax evasion (Harris, 2017). If the attitude of taxpayers towards taxation negative they will be reluctant to pay their obligation to the authority, the reverse is true taxpayers who have positive attitudes towards taxation.…”

“…As the world has evolved, tax compliance has taken a back seat with tax avoidance and tax evasion being at the forefront of the taxpayer's main objective. Tax avoidance is the use of legal means to reduce one's tax liability while tax evasion is the use of illegal means to reduce that tax liability (Alleyne & Harris, 2017). Tax evasion is a danger to the community, the countries and international organizations have been making an effort to fight undesirable phenomena related to taxation, the tax evasion, or tax fraud (Saxunova & Szarkov, 2018).…”

The Moderating Effect of Corruption on Deterrent and Socio- Psychological Factors for Tax Compliance: A Conceptual Model for Small and Medium Enterprises in Uganda

“…A number of scholars indicate there being a number of risks of being detected. For instance, Allingham and Sandmo model (1972) and those who advocate for the Fischer's model (1992), put further emphasis on the probability of detection of noncompliance (Bosco & Mittone 1997), yet Alleyne & Harris (2017) and Carnes & Englebrecht (1995) put more prominence on perceived risk of detection. Allowing for the related conversations made by earlier scholars, the most conclusive and encompassing definition is that of Fischer, Wartick & Mark (1992) which proposes that the probability that tax noncompliance will be detected as revenue authorities across the globe strive to achieve high tax compliance levels.…”