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Power, Trust and Transparency as Determinant Factors of Tax Compliance: A Systematic Review

Author

Listed:
  • Mohammed Saleh Al-Maghrebi
  • Noor Sharoja Sapiei
  • Mazni Abdullah

Abstract

This systematic review emphasizes the importance of expanding and deepening the theoretical framework of research on individual taxpayer compliance, particularly through integrated models. The main objective of this article is to systematically review the literature on tax compliance based on three determinants: coercive power, trust in tax authorities and transparency; and provide a direction for future research. There are three review questions in this paper, namely: (1) What is the present situation of the literature on the connection between coercive power and tax compliance; (2) What is the present situation of the literature on the connection between trust in tax authorities and tax compliance; (3) What is the present situation of the literature on the connection between “relationship transparency” and tax compliance. A systematic review of the literature was used to perform this review, considering 66 studies published in several suggested databases. The results are a call for a more sophisticated understanding of not only how suggested factors (Coercive Power; Trust; Transparency) affect tax compliance, but also how they interact and change each other and then, influence tax compliance. This review implies that enhancing tax service, transparency, and government trust is more successful and relatively easier to proceed than encouraging positive behaviour among taxpayers. This review is the first to systematically analyse the literature on tax compliance based on three determinants (coercive power, trust and transparency), as found, no synthesis studies have comprehensively covered the issue. This results in unique, motivating, and relevant discoveries that may be used to direct future studies and serve as a tool for academics, practitioners, and policymakers. Furthermore, this study would aid governments and tax authorities to understand the motives and perceptions of taxpayers into taxes.

Suggested Citation

  • Mohammed Saleh Al-Maghrebi & Noor Sharoja Sapiei & Mazni Abdullah, 2022. "Power, Trust and Transparency as Determinant Factors of Tax Compliance: A Systematic Review," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 8(3), pages 312-335.
    • Handle: RePEc:aiy:jnljtr:v:8:y:2022:i:3:p:312-335
    DOI: https://doi.org/10.15826/jtr.2022.8.3.124
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    References listed on IDEAS

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    1. Prichard,Wilson & Custers,Anna Louise & Dom,Roel & Davenport,Stephen R. & Roscitt,Michael Anthony, 2019. "Innovations in Tax Compliance : Conceptual Framework," Policy Research Working Paper Series 9032, The World Bank.
    2. James Alm & Erich Kirchler & Stephan Muehlbacher & Katharina Gangl & Eva Hofmann & Christoph Kogler & Maria Pollai, 2012. "Rethinking the Research Paradigms for Analysing Tax Compliance Behaviour," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 33-40, July.
    3. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742.
    4. Erich Kirchler & Stephan Muehlbacher & Barbara Kastlunger & Ingrid Wahl, 2007. "Why Pay Taxes? A Review of Tax Compliance Decisions," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0730, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Pasquier, Thomas & Eyers, David, 2016. "Information Flow Audit for Transparency and Compliance in the Handling of Personal Data," Working Paper 424621, Harvard University OpenScholar.
    6. Mardhiah Mardhiah & Riyana Miranti & Robert Tanton, 2019. "The Slippery Slope Framework: Extending the Analysis by Investigating Factors Affecting Trust and Power," CESifo Working Paper Series 7494, CESifo.
    7. Benno Torgler, 2004. "Tax Morale, Trust and Corruption: Empirical Evidence from Transition Countries," CREMA Working Paper Series 2004-05, Center for Research in Economics, Management and the Arts (CREMA).
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    More about this item

    Keywords

    coercive power; trust in tax authority; relationship transparency; tax compliance; tax non-compliance; tax system; systematic review;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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