Testing Assumptions of the “Slippery Slope Framework” Using Cross-Country Data: Evidence From Sub-Saharan Africa

Abstract

The emergence of “Slippery Slope Framework” has attracted many researchers who examined the effect of trust in authorities and power of authorities on tax compliance using both the real taxpayer and student subjects. However, these researchers have neglected the use of cross-country data to examine these effects. In line with prior empirical evidences that confirm the effect of trust and power of authorities on tax compliance, this study hypothesizes that both trust and power have association with tax compliance across countries. It further hypothesizes that trust has more association with tax compliance than power. This study is based on 49 Sub-Saharan African countries as the population, out of which 37 countries were selected using multi-stage random sampling. The empirical results from these countries reveal that there is an association between both trust in authorities and power of authorities and tax compliance across the 37 Sub-Saharan African countries, but the association between power of authorities and tax compliance is stronger than that of trust in authorities and tax compliance. Further, the result does not find any causing effect of both trust and power on tax compliance in the countries that constituted the study sample.Keywords: Authorities; Compliance; Power; Tax; Trust.

Trust and power as predictors to tax compliance: Global evidence

“…In order to confirm whether or not the propositions of the Slippery Slope Framework hold in real world situations, various studies were undertaken for validation. For example, in Europe (Kastlunger, et al, 2013;Kirchler, et al, 2008;Kogler, et al, 2013;Pellizzari & Rizzi, 2014;Siglé, et al, 2018;Wahl, et al, 2010) and later Asia (Andyarini, Subroto, & Subekti, 2019;Batrancea & Nichita, 2014;Damayanti & Martono, 2018;Faizal et al, 2017;Mardhiah, Miranti & Tanton, 2019), Africa (Ayuba, Saad & Ariffin, 2018;Mas' ud, et al, 2015;Mas'ud, et al, 2014), and South America (da Silva, Guerreiro & Flores, 2019). However, most of these validations are country specific, except a few such as Mas' ud, et al, (2015) and Mas'ud, et al, (2014) that have a continental focus with emphasis on Africa.…”

“…European data in this regard was considered by (Benk & Dubak, 2011;Kastlunger, et al, 2013;Kirchler, et al, 2008;Kogler, et al, 2013;Pellizzari & Rizzi, 2014;Wahl, et al, 2010), while Asian experience was analyzed in (Andyarini, Subroto, & Subekti, 2019;Batrancea & Nichita, 2014;Faizal et al, 2017). A few studies that employed cross-country analyses were Mas' ud et al, (2015) and Mas'ud et al, (2014). However, these studies mainly focused on African states, hence, the need for global cross-country inference has motivated this paper.…”

Evaluating policy approaches for tackling informal entrepreneurship

“…However, when analysing the perception of citizens, the findings are not conclusive. Analysing previous citizen surveys, the finding is that while some confirm the effectiveness of this approach, revealing that increasing the actual and/or perceived level of deterrents reduces non-compliance (Feld and Frey, 2002;Mas'ud et al, 2015;Mazzolini et al, 2017), others found no effect (Hartl et al, 2015;Shaw et al, 2008;Franic, 2015, 2016), and yet others that increasing the actual and/or perceived level of deterrents might lead to greater non-compliance due to a breakdown of the social contract between the government and its citizens (Chang and Lai, 2004;Hofmann et al, 2017;Kaplanoglou and Rapanos, 2015;Murphy, 2005Murphy, , 2008Murphy and Harris, 2007).…”

Explaining and Tackling Under-Declared Employment in FYR Macedonia: The Employers Perspective

“…However, despite the widespread adoption of this rational economic actor approach by governments, the evidence that increasing the penalties and probability of detection leads to compliance is less than conclusive. Some studies confirm that compliance is significantly higher when the levels of penalties and risks of detection are higher (Feld and Frey 2002;Mas'ud et al 2015;Mazzolini et al 2017), others find no significant association (Hartl et al 2015;Shaw et al 2008;Franic 2015, 2016), and yet others that non-compliance increases (Chang and Lai 2004;Hofmann et al 2017;Kaplanoglou and Rapano, 2015;Murphy 2005Murphy , 2008Murphy and Harris 2007). A problem specific to salary under-reporting, moreover, is that this practice is difficult for tax and labour inspectors to detect.…”