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Voluntary tax compliance behavior of individual taxpayers in Pakistan

Author

Listed:
  • Ibn e Hassan

    (Bahauddin Zakariya University
    College of Business Administartion, University of Hail)

  • Ahmed Naeem

    (Bahauddin Zakariya University)

  • Sidra Gulzar

    (Bahauddin Zakariya University)

Abstract

Governments settle their financial obligations and pay for the public expenditures largely through finances generated from taxes. For many developing countries like Pakistan, the state authorities are still having difficulty to achieve tax compliance. Existing literature has yet to traverse individual's tax compliance behavior on developing countries. The current study, however, explores the relationships among voluntary tax compliance behavior of individual taxpayers with selected economic, social, behavioral and institutional factors. This individual tax compliance behavior is studied through the multi-perspective lenses of the theory of attribution, equity theory, expected utility theory, and social exchange theory. Quantitative design using the survey method was employed to collect data from 435 individual taxpayers through questionnaire. For testing linkage between constructs, through mediation and moderation tests, structural equation modeling technique was used. The results suggest that tax compliance simplicity has a larger impact on tax filing than perception about Government Spending and tax morale. Furthermore, perception of fairness significantly mediates the strengths between morale, simplicity, government spending and compliance behavior.

Suggested Citation

  • Ibn e Hassan & Ahmed Naeem & Sidra Gulzar, 2021. "Voluntary tax compliance behavior of individual taxpayers in Pakistan," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-23, December.
    • Handle: RePEc:spr:fininn:v:7:y:2021:i:1:d:10.1186_s40854-021-00234-4
    DOI: 10.1186/s40854-021-00234-4
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    2. Hamisi K. Sama, 2022. "Conceptualising Tax Avoidance on Industry 4.0 in Tanzania: The Imperatives of Value Chain Analysis," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 123-134.
    3. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2023. "Effect of Goods and Service Tax System on Business Performance of Micro, Small and Medium Enterprises," SAGE Open, , vol. 13(2), pages 21582440231, June.
    4. Inna Cabelkova & Lubos Smutka, 2021. "The Effects of Solidarity, Income, and Reliance on the State on Personal Income Tax Preferences. The Case of the Czech Republic," Sustainability, MDPI, vol. 13(18), pages 1-22, September.
    5. Vanina Adoriana Trifan & Silviu Gabriel Szentesi & Lavinia Denisia Cuc & Mioara Florina Pantea, 2023. "Assessing Tax Compliance Behavior Among Romanian Taxpayers: An Empirical Case Study," SAGE Open, , vol. 13(3), pages 21582440231, September.

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