IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v79y2025ics0275531925003332.html
   My bibliography  Save this article

The determinants and consequences of tax avoidance: A psychological contract perspective

Author

Listed:
  • Anggraini, Puspita Ghaniy
  • Sholihin, Mahfud
  • Mangena, Musa
  • Wijayana, Singgih
  • Rakhman, Fu’ad

Abstract

This study examines the determinants and consequences of tax avoidance from the psychological contract perspective in tax relationships. The perspective relies on a reciprocal relationship between parties in predicting taxpayer behavior after evaluating how well the government manages taxes. Using data for a sample of 60 countries over 2009–2019, the results support the notion that taxpayers' willingness to pay taxes relies on how a government manages tax funds. Specifically, good government tax policies, namely better-quality regulations, less complicated bureaucracy, and more appropriate use of taxes, are associated with lower tax avoidance. Further, the results indicate that public participation and transparency should be implemented cautiously since they can motivate taxpayers to avoid tax payments. In addition to good tax policies, lower tax avoidance is observed in countries with a low tax burden, close government-citizens relations, and developed economy. Understanding the determinants of tax avoidance is important for government policy given that tax avoidance undermines national development across economic, social, and environmental dimensions.

Suggested Citation

  • Anggraini, Puspita Ghaniy & Sholihin, Mahfud & Mangena, Musa & Wijayana, Singgih & Rakhman, Fu’ad, 2025. "The determinants and consequences of tax avoidance: A psychological contract perspective," Research in International Business and Finance, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003332
    DOI: 10.1016/j.ribaf.2025.103077
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531925003332
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2025.103077?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:79:y:2025:i:c:s0275531925003332. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.