Determinants of Tax Morale in Croatia: an Ordered Logit Model

Abstract

Background: A lower tax morality leads to an increased readiness to become active in the unofficial economy and causes the lack of public revenues.Objectives: The aim of this paper is to investigate determinants that shape tax morale of Croatian citizens.Methods/Approach: An ordered logit model is employed to evaluate which determinants shape tax morale of Croatian citizens. Data for the research were collected from 2,000 face-to-face interviews conducted in Croatia in late 2015.Results: The descriptive analysis illustrates that 52 percent of respondents reported a high level of tax morale, 26 percent of respondents have a low tax morale, while 8 and 14 percent have a mid-low and a mid-high tax morale, respectively. The ordered logit analysis revealed that gender, age, financial situation, region, and participation in the unofficial economy have an impact on the tax morale.Conclusions: Besides socio-demographic, socio-economic, and spatial determinants, a great number of sanctions for participation in informal activities also shapes tax morale of the Croatian citizens. More precisely, marginal effects show that those perceiving the expected sanctions as “normal tax or social security contributions due, plus a fine or a prison sentence” have by 6.3 percentage points higher probability of reporting the highest tax morale than others.

Life Satisfaction and Tax Morale in Azerbaijan: Mediating Role of Institutional Trust and Financial Satisfaction

“…The evidence is straightforward and in the same line as previous studies [10,12,14,22]. Additionally, we find that tax morale is harmed when institutional trust [11,16,[21][22][23][24][25][26] and financial satisfaction [7,10,12,14,22,[27][28][29][30][31][32] are low. Finally, we find a significant relationship between life satisfaction and tax morale when we use our controls such as age, gender, job experience, and educational factors.…”

“…The current study contributes to the tax compliance literature in two ways. First, although there are many papers that examine the country-level drivers of tax morale in developing and developed countries [14,15], evidence on South Caucasian countries, particularly Azerbaijan, is scarcer and more limited [16]. Second, the current study extends and complements previous studies on the relationship between life satisfaction and tax morale by testing the mediating effects of institutional trust and financial satisfaction.…”

“…[19] found a significant negative association between institutional trust and tax morale in Portugal. Similarly, research conducted in Croatia observed that the main determinants of tax evasion are low tax morality and a feeling of unjustified behavior of governments regarding collected taxes [16]. Ref.…”

Tax motivation of entrepreneurs in five voivodeships in Poland – research results

“…The tax motivation is understood precisely as the taxpayer's internal willingness to pay taxes. The literature review indicates that tax motivation depends on number of factors including: impact of religion-regardless of the type of religion-and the level of spirituality (Alkhatib et al, 2019;McGee and Benk, 2019;Carsamer and Abbam, 2020;Yuniarta and Purnamawati, 2020;Khalil and Sidani, 2020;Silveus and Stoddard, 2020;Calhoun, 2021;Ishak and Ali, 2021;Kurt and Kurt, 2021;Rahmawati and Dwijayanto, 2021;Wang and Lu, 2021), feeling fairly treated by the tax system and officials (Gerger et al, 2014;Niesiobędzka, 2009), level of knowledge about the operation of tax systems (Kassa, 2021;Kushwah et al, 2021;Newman and Nokhu, 2018;Timothy and Abbas, 2021), tax conscience (Fotiadis and Chatzoglou, 2021), tax discipline (Alm and Torgler, 2006), financial situation (Bejaković and Bezeredi, 2019), trust in public authorities (Alm and Torgler, 2006;Feld and Torgler, 2007;Filippin et al, 2013;Frey and Torgler, 2007), culture (Olaniyi and Akinola, 2020;Alm and Torgler, 2006;Nerre, 2008;D'Attoma, 2018;Feld and Torgler 2007;Feld et al 2008;Kountouris andRemoundou, 2013, after: Horodnic, 2018), gender (Alm and Torgler, 2006;Torgler and Murphy, 2014;Chan et al, 2018;Cyan et al, 2016;…”

Tax Moral and Compliance of Individual Taxpayer

“…Taxpayers who think about the tax sanctions that will be received if they commit tax fraud will be motivated to carry out their obligations honestly. Research conducted by Williams and Horodnic (2015) and Bejaković and Bezeredi (2019) states that tax sanctions have a relationship with tax morale. Tax sanctions relate to taxpayer compliance based on research conducted by (Basri & Dwimulyani, 2018).…”