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Tax Morale And Social Business In Mexico

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  • ROBERTO FUENTES-CONTRERAS

    (School of Economics and International Relations, Universidad Autónoma de Baja California, Calzada Tecnológico #14418, Colonia Mesa de Otay Tijuana, Baja California, Mexico 22390, Mexico)

  • ALEJANDRO MUNGARAY-LAGARDA

    (School of Economics and International Relations, Universidad Autónoma de Baja California, Calzada Tecnológico #14418, Colonia Mesa de Otay Tijuana, Baja California, Mexico 22390, Mexico)

  • MARTIN RAMIREZ-URQUIDY

    (School of Economics and International Relations, Universidad Autónoma de Baja California, Calzada Tecnológico #14418, Colonia Mesa de Otay Tijuana, Baja California, Mexico 22390, Mexico)

Abstract

This research presents empirical results about the importance of tax morale in the probability of tax compliance in social businesses. It highlights the relevance of increasing the intrinsic value to the social business owner on paying taxes, instead of the traditional approach of increasing punishment, to reduce non-compliance. The paper suggests changing the focus question from “Why don’t they pay taxes?” to “Why, despite the low probability of being punished for not paying taxes, do some social business owners comply with their tax contribution?”. The main results of the research point out that factors such as public expenditure in economic development increases the probability of tax compliance in social businesses, whereas public expenditure in social programs decreases this probability.

Suggested Citation

  • Roberto Fuentes-Contreras & Alejandro Mungaray-Lagarda & Martin Ramirez-Urquidy, 2020. "Tax Morale And Social Business In Mexico," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 25(02), pages 1-10, June.
    • Handle: RePEc:wsi:jdexxx:v:25:y:2020:i:02:n:s1084946720500119
    DOI: 10.1142/S1084946720500119
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