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We Learn Not for School but for Life: Empirical Evidence of the Impact of Tax Literacy on Tax Compliance

Author

Listed:
  • Anca Nichita
  • Larissa Batrancea
  • Ciprian Marcel Pop
  • Ioan Batrancea
  • Ioan Dan Morar
  • Ema Masca
  • Ana Maria Roux-Cesar
  • Denis Forte
  • Henrique Formigoni
  • Adilson Aderito da Silva

Abstract

Tax revenues are fundamental budgetary resources for the majority of governments around the world. Consequently, the goal of identifying efficient strategies that facilitate an increase in tax compliance should be on the agenda of all tax authorities. By surveying 358 Romanian taxpayers, our study analyzes how tax literacy influences tax compliance, thus contributing to the existing literature, which reports few results on this topic. Using moderation analysis, we find that tax literacy is one of the key elements shaping tax compliance. Respondents who reported more neutral social representations of taxation concepts turned out to be more tax literate and more willing to comply voluntarily. The level of tax literacy was estimated using a tax literacy index created for this purpose. Our study provides policy makers with a starting point for understanding how taxpayers comprehend taxation concepts and how they relate to the tax system. Equipped with such information, those charged with designing tax policy could help raise literacy among taxpayers, making the role of tax collection more salient and ultimately improving tax compliance.

Suggested Citation

  • Anca Nichita & Larissa Batrancea & Ciprian Marcel Pop & Ioan Batrancea & Ioan Dan Morar & Ema Masca & Ana Maria Roux-Cesar & Denis Forte & Henrique Formigoni & Adilson Aderito da Silva, 2019. "We Learn Not for School but for Life: Empirical Evidence of the Impact of Tax Literacy on Tax Compliance," Eastern European Economics, Taylor & Francis Journals, vol. 57(5), pages 397-429, September.
    • Handle: RePEc:mes:eaeuec:v:57:y:2019:i:5:p:397-429
    DOI: 10.1080/00128775.2019.1621183
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    Citations

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    Cited by:

    1. James Alm & Lilith Burgstaller & Arrita Domi & Amanda März & Matthias Kasper, 2023. "Nudges, Boosts, and Sludge: Using New Behavioral Approaches to Improve Tax Compliance," Economies, MDPI, vol. 11(9), pages 1-22, September.
    2. Maria Rosa Intansari & Supramono Supramono, 2022. "The Effect of Tax Literacy on Tax Compliance: The Moderating Role of Patriotism," Technium Social Sciences Journal, Technium Science, vol. 34(1), pages 455-464, August.
    3. Ioan Batrancea & Larissa Batrancea & Malar Maran Rathnaswamy & Horia Tulai & Gheorghe Fatacean & Mircea-Iosif Rus, 2020. "Greening the Financial System in USA, Canada and Brazil: A Panel Data Analysis," Mathematics, MDPI, vol. 8(12), pages 1-13, December.
    4. Larissa Batrancea & Malar Mozhi Rathnaswamy & Ioan Batrancea, 2021. "A Panel Data Analysis of Economic Growth Determinants in 34 African Countries," JRFM, MDPI, vol. 14(6), pages 1-15, June.
    5. Di Wang & Frank McGroarty, 2022. "Does perfectionism influence individual financial risk tolerance and financial well-being? Evidence from an online survey data from the US," SN Business & Economics, Springer, vol. 2(11), pages 1-32, November.
    6. Fanny Salignac & Julien Hanoteau & Ioana Ramia, 2022. "Financial Resilience: A Way Forward Towards Economic Development in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(1), pages 1-33, February.
    7. Liangliang Liu & Wenqing Zhang, 2022. "Vertical fiscal imbalance and government spending on science and technology in China," Economic Change and Restructuring, Springer, vol. 55(3), pages 1953-1971, August.
    8. Andreas-Daniel Cocis & Larissa Batrancea & Horia Tulai, 2021. "The Link between Corporate Reputation and Financial Performance and Equilibrium within the Airline Industry," Mathematics, MDPI, vol. 9(17), pages 1-12, September.
    9. Valetin Marian Antohi & Costinela Fortea & Monica Laura Zlati & Romeo-Victor Ionescu & Cristian Mirica, 2022. "Efficiency of financial indicators of the Romanian state budget, an objective of economic security during the epidemiological crisis," Journal of Financial Studies, Institute of Financial Studies, vol. 12(7), pages 38-51, May.
    10. Citra Sukmadilaga & Srihadi Winarningsih & Tri Handayani & Eva Herianti & Erlane K Ghani, 2022. "Fraudulent Financial Reporting in Ministerial and Governmental Institutions in Indonesia: An Analysis Using Hexagon Theory," Economies, MDPI, vol. 10(4), pages 1-14, April.
    11. Larissa Batrancea, 2021. "The Influence of Liquidity and Solvency on Performance within the Healthcare Industry: Evidence from Publicly Listed Companies," Mathematics, MDPI, vol. 9(18), pages 1-15, September.
    12. Larissa Batrancea, 2021. "The Nexus between Financial Performance and Equilibrium: Empirical Evidence on Publicly Traded Companies from the Global Financial Crisis Up to the COVID-19 Pandemic," JRFM, MDPI, vol. 14(5), pages 1-12, May.
    13. Lidija Hauptman & Berislav Zmuk & Ivana Pavic, 2024. "Taxpayers' attitudes toward tax compliance in the Slovenian tax system: differences according to gender, income level and size of settlement," Public Sector Economics, Institute of Public Finance, vol. 48(2), pages 177-201.
    14. Larissa M. Batrancea, 2021. "An Econometric Approach on Performance, Assets, and Liabilities in a Sample of Banks from Europe, Israel, United States of America, and Canada," Mathematics, MDPI, vol. 9(24), pages 1-22, December.
    15. Larissa Batrancea & Marcel Ciprian Pop & Malar Maran Rathnaswamy & Ioan Batrancea & Mircea-Iosif Rus, 2021. "An Empirical Investigation on the Transition Process toward a Green Economy," Sustainability, MDPI, vol. 13(23), pages 1-12, November.
    16. Batrancea Larissa & Rathnaswamy Malar Maran & Batrancea Ioan & Nichita Anca & Rus Mircea-Iosif & Tulai Horia & Fatacean Gheorghe & Masca Ema Speranta & Morar Ioan Dan, 2020. "Adjusted Net Savings of CEE and Baltic Nations in the Context of Sustainable Economic Growth: A Panel Data Analysis," JRFM, MDPI, vol. 13(10), pages 1-17, October.

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