Socio-Economic Variables and Tax Compliance in the Scope of Fiscal Sociology: A Research on the European Union and Oecd

Abstract

Fiscal sociology investigates financial events from a sociological point of view and explores the effects of tax and spending policies on society and also the role and influence of the elements that constitute society in defining these policies. As the tax system and policies of each country reflect the characteristics of the country's social, political, cultural and economic structure, tax systems differ according to the characteristics of the structure of the society. Tax systems that are in line with the social structure ensure that tax compliance is achieved at a high level. From this point of view, aim of the study is defined as investigating the level of interaction of the structural elements with tax compliance. In this respect, tax compliance and socioeconomic variables that affect the structure of the society are included in the study and they are analyzed using panel data analysis covering the 2008-2016 time period by making comparisons between the European Union and OECD countries. As a result of the analysis, the main point in increasing tax compliance is that the tax policies are adopted by the society, for this reason it is concluded that implementations that reflect the society need to be taken as a basis while making the regulations on the tax system.

Analysis of the Tax Compliance in the EU: VECM and SEM

“…These results are in line with the literature. For example, the positive and important impact on compliance from trust in the authorities has been found in various works [3,7,[9][10][11][14][15][16][17][18][19][20][21][22][23]. The trust variable was related to the voluntary compliance behavior, which may be more effective than the enforced compliance behavior.…”

“…The relationship between tax authorities and taxpayers has a significant effect on tax behavior [8]. The trust variable is positively associated with tax compliance [14][15][16] and has an important impact [7,[17][18][19][20][21][22][23]. Participation in tax non-compliance increases when trust is low [24].…”

Power, trust and tax compliance: Evidence from clusters of countries

“…Additionally, past research has demonstrated a significant and favorable association between authority's power and tax compliance (Ali et al, 2001;Appah & Wosowei, 2016;Engida & Baisa, 2014;Erul, 2020a;Inasius, 2019;Kirchler et al, 2008;Ntiamoah et al, 2019;Nzioki & Osebe, 2014;Palil et al, 2013;Saeed, Zubair, & Khan, 2020;Ştefura, 2013;Tilahun, 2018). According to the impulse function, a positive shock in trust has a favorable impact on tax compliance before a negative impact in the case of the East Europe cluster, the Africa and Middle East cluster, and the Confucian Asia cluster.…”

“…Trust in the government influences tax compliance (Jimenez & Iyer, 2016). Tax compliance may be positively associated with trust (Erul, 2020a;Tsikas, 2020) with an essential impact on tax compliance (D'Attoma, 2020;Kasper, Kogler, & Kirchler, 2015;Lisi, 2019;Mas' ud, Abd Manaf, & Saad, 2019). Taxpayers' trust impacts tax compliance (Nasution, Santi, Husaini, Fadli, & Pirzada, 2020).…”

“…Regarding the power variable, the results from the literature show an influence on tax compliance (Erul, 2020b;Kasper et al, 2015;Kogler, Muehlbacher, & Kirchler, 2015). Audits and the rule of law (power variables) positively influence tax compliance (Erul, 2020a). Audit probability affects individual taxpayers' compliance (Palil, Hamid, & Hanafiah, 2013).…”