Beyond enforcement: what drives tax morale in Ghana?

Abstract

Purpose – This paper aims to investigate the determinants of the motivation to pay tax in Ghana. Traditionally, raising tax morale to ensure compliance is often tied to the level of prevailing enforcement. But beyond enforcement, why do citizens pay tax? Design/methodology/approach – This paper relied on the sixth wave of the World Values Survey data in determining the drivers of tax morale. It used the probit model with different specifications to determine robustness of the results. Findings – The findings remain robust to model specification and show a non-linear relationship between age and tax morale. The level of education, marital status, patriotism, sector of employment, satisfaction with democracy and one’s “fear of God” do not matter in tax morale. The economic class of a person per se is also far from being a significant driver and that people are intrinsically motivated to pay tax once they are satisfied with their financial situation, have trust in the government as well as confidence in the parliament. Originality/value – In addition to being a pioneering micro-econometric work on the determinants of tax morale in Ghana, the main contribution of the study lies in its investigation of a non-linear relationship between age and tax morale in Ghana.

Tax morale and institutional theory: a systematic review

“…Starting with culture, which represents broad social norms which are persistent in time (Luttmer and Singhal, 2014), a large body of literature identifies a relationship between the informal institutions and tax morale. Analysing individuals living in the same environment but from different cultures, Kountouris and Remoundou (2013) Alm and Torgler (2006), Chan et al (2018), Daude et al (2012), Doerrenberg and Peichl (2010), D'Attoma (2015), Filippin et al (2013), Frey and Torgler (2007), Lago-Peñas and Lago-Peñas (2010), Lubian and Zarri (2011), Torgler ( , c, 2004b, , Williams and Martinez (2014) Part-time employees, unemployed people and students have lower tax morale than full-time employees Daude et al (2012), Torgler ( , c, d, 2004b, Williams and Martinez (2014) Pensioners/retired have higher tax morale relative to non-pensioners Cyan et al (2016), Doerrenberg and Peichl (2010), Feld et al, 2008, Martins andGomes (2014), Torgler (2005c), Torgler and Murphy (2004), Vythelingum et al (2017) Housewives/housekeepers have lower tax morale Ibrahim et al (2015), Williams and Martinez (2014) Those engaged in undeclared work have lower tax morale Horodnic and Williams (2016), Williams andHorodnic (2016a, c, 2017b), Windebank and Horodnic (2016 Table III. 876 IJSSP 38,9/10 morale in the country of origin affects the tax morale of the individuals in the hosting country. Similarly, comparing the tax morale in a similar environment in terms of deterrent measures yet with different cultural features, a higher tax morale was identified in East than in West Germany, which shows that tax morale is driven rather by other factors than deterrents such as informal institutions (Feld and Torgler, 2007;Feld et al, 2008;Torgler, 2002…”

Taxpayer Compliance in SMEs Sector: A Theory of Planned Behavior

“…The behavior studied in this research is tax compliance behavior. Tax compliance is very important to countries around the world because the tax is one of the sources of state income that is used to fund public needs (Ritsatos, 2014;Ibrahim, Musah, & Abdul-Hanan, 2015). Tax compliance refers to the fulfillment of all taxpayers' obligations based on tax law and regulations that apply (Palil & Mustapha, 2011).…”

Neo-Kurumsal Perspektif ile Vergi Uyumsuzluğunu Anlamak: Türkiye’deki Bir Kamuoyu Araştırmasından Bulgular

“…In addition to the roles of these normative, cultural and regulatory pillars on tax morale, an economic perspective is also included to have a wider view on the issue of tax morale. Indeed, previous studies have revealed not only that the level of economic development is positively correlated with tax morale (Doerrenberg & Peichl, 2010;Gerstenbluth et al, 2012;Williams & Krasniqi, 2017;Williams & Martinez, 2014) but also that higher satisfaction with one's financial situation is significantly associated with higher tax morale (Alasfour et al, 2016;D'Attoma, 2015;Filippin et al, 2013;Ibrahim et al, 2015;Kondelaji et al, 2016;Martins & Gomes, 2014;Ristovska et al, 2013;Williams & Horodnic, 2016c;Windebank & Horodnic, 2016). To test this economic dimension, therefore, the following hypothesis is tested:…”