Make Me Want to Pay. A Three-Way Interaction Between Procedural Justice, Distributive Justice, and Power on Voluntary Tax Compliance

Abstract

Tax compliance involves a decision where personal benefits come at the expense of society and its members. We explored the roles of procedural and distributive justice and citizens’ perceptions of the tax authority’s power in stimulating voluntary tax compliance. Distributive and procedural justice have often (but not always) been shown to interact in such a way that high distributive justice or high procedural justice is sufficient to predict positive responses to authorities and the social collective they represent. We examined whether this interaction predicts voluntary (but not enforced) tax compliance, in particular among citizens who perceive the tax authority’s power as high (vs. low). The results of two field studies among Ethiopian (Study 1) and United States (Study 2) taxpayers supported our predictions. With this research we connect the roles of two core social psychological antecedents of tax compliance (i.e., distributive and procedural justice) with that of a deterrent factor (i.e., authority power) and obtain support for the psychological process underlying the Distributive Justice × Procedural Justice interaction in two diverging tax environments.

Accountability, Legitimacy, and Voluntary Tax Compliance: A Case Study in Tax Offices in Mazandaran Province of Iran

“…The results also indicated the positive impact of the political and social dimension of legitimacy on voluntary tax compliance. This result was consistent with Levi et al (2009), Gobena, (2017), and Van Dijke et al (2019 who concluded procedural and distributive justice provide an encompassing index of the legitimacy of tax authorities and enhance voluntary tax compliance. The impact of accountability as 'responsiveness'on legitimacy has been investigated for the first time in the present study, although pursuing the wishes or needs of the citizens in this type of accountability covers with the other various distinct concepts of accountability such as transparency, mentioned in the literature (Koppel, 2010;Wareman, 2013).…”

Do Fairness Perceptions Matter in Tax Compliance? The Effect of Procedural × Distributive Justice Interaction on Intention to Pay Taxes

“…Nonetheless, scholars have realized that fair distribution of outcomes (i.e., distributive justice) and fair exchange equity are insufficient to explain the response of members of social collectives to the collective authorities (Wenzel, 2003;Van Dijke et al, 2019). Specifically, it is also equally important to consider the perceived fairness of the decision-making procedures that authorities apply in arriving at the distributive decisions (see Doyle et al, 2009;Seidikides et al, 2010;Farrar, 2015).…”

“…In the current study, the aim is to explore the interactive effect of the two elements of justice, namely procedural and distributive justice. Of course, van Dijke, Gobena & Verboon (2019) showed that procedural by distributive justice interaction affects voluntary tax compliance, but only when legitimate power of the tax authority is high (vs. low). In this study, the use of authority power as a boundary conditioned is omitted to examine the interactive role the two components of justice on intention to pay taxes.…”

The Justice of Tax Amnesty and Tax Compliance: Empirical Study in Indonesia

“…Distributive justice is proven to play a role in convincing taxpayers to obey the law (Verboon & Dijke, 2007). Distributive justice encourages voluntary tax compliance even in countries with different tax systems, namely Ethiopia and the United States (Dijke et al, 2019).…”

“…Taxpayers who receive procedurally fair treatment tend to assess the legitimacy of tax authorities positively (Murphy, 2008). Procedural justice can increase voluntary tax compliance (Gobena & Dijke, 2017;(Dijke et al, 2019).…”