The role of cognitive moral development in tax compliance decision making

Purpose - This paper aims to investigate the role of cognitive moral development (CMD) in tax compliance decision. In particular, the study compares tax compliance degree in two different tax systems: synergistic and antagonistic tax climates. Design/methodology/approach - Build on the CMD theory, this study uses a paper and pencil laboratory experiment that involved 157 participants to test the hypotheses. Findings - CMD has significant contribution to the tax compliance decision, especially for taxpayers at both the pre-conventional and conventional level. Taxpayers who have achieved post-conventional level, however, do not shift their compliance degree even when the tax climate changed. The present results support the CMD theory. Originality/value - To the best of the authors’ knowledge, the present study is the first to investigate the role of CMDin tax compliance decision by comparing two different tax systems: synergistic and antagonistic tax climates. This study has theoretical and practical contributions. From theoretical perspective, the findings provide evidence that CMD influence tax compliance decision-making processes. In the practical terms, this research may provide a deep insight on the important of government and tax authorities to improve the taxpayers’ moral cognitive, e.g. through any activities which aims to boost them to the level of post-conventional.