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The Impact of Tax Awareness on Tax Compliance: Evidence from Vietnam

Author

Listed:
  • Thuy Nguyen Thi Le
  • Yen Mac Thi Hai
  • Tran Cuong Thi
  • Minh Nguyen Thi Hong

Abstract

In Vietnam, tax authorities have implemented many initiatives to support administrative procedural reform with a taxpayer-centered approach, particularly the self-calculation, self-filing, and self-paying methods, where taxpayers are responsible for their tax declaration and payment. The issue is that tax evasion or compliance behavior is derived from taxpayers’ awareness. The study investigates the connection between tax awareness and tax compliance in Vietnam. This study applies a quantitative analysis with a research sample of 380 individual taxpayers employed in various industries across Vietnam. The questionnaire is sent to taxpayers by directly email and via the tax authorities. The collected data are then processed and analyzed by SPSS v.22. The study applies Cronbach’s Alpha as a tool for assessing scales’ reliability or internal consistency. The research results indicate a significant direct effect of the independent variable with the dependent variable, particularly tax awareness positively influences tax compliance and accounts for 37.3% of the variation in tax compliance. Based on the research findings, this study proposes some policy implications to enhance tax awareness and improve voluntary tax compliance behaviors including (1) conducting an overall assessment program on the current level of tax awareness and developing targeted programs for different groups of taxpayers based on those results; (2) transforming tax educational methods to improve taxpayers’ accessibility and engagement, catering to different learning preferences and technological abilities; (3) integrating tax topics into high school, university programs or in training programs for new employees; (4) promoting a culture of tax compliance through organizing tax awareness competitions and introducing rewards for taxpayers with high compliance levels.

Suggested Citation

  • Thuy Nguyen Thi Le & Yen Mac Thi Hai & Tran Cuong Thi & Minh Nguyen Thi Hong, 2024. "The Impact of Tax Awareness on Tax Compliance: Evidence from Vietnam," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 10(2), pages 214-227.
    • Handle: RePEc:aiy:jnljtr:v:10:y:2024:i:2:p:214-227
    DOI: https://doi.org/10.15826/jtr.2024.10.2.165
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    References listed on IDEAS

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    1. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742.
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    More about this item

    Keywords

    tax awareness; tax compliance; tax education; taxpayers; tax policy;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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