Leveraging behaviour for tax compliance / Siti Hawa Shuid

Tax compliance is a cornerstone of functioning societies, providing the necessary revenue for societal infrastructure and public services. However, the dilemma arises between individual behaviour and the societal obligation to contribute financially to the collective welfare. The behavioural factors can be looked at in terms of perceptions of tax fairness, subjective norms, trust towards the government and tax authorities, as well as the role of tax professionals. The findings of Rashid's (2020) study in Bangladesh revealed that if the taxpayers perceived the tax system as fair, this would cultivate and affect their intention to comply with the tax laws. Similar findings were highlighted by Hayat et. al.’s (2022) study in Malaysia. In addition, if the taxpayers believed that the tax rate was appropriate for their income level, they would be willing to pay tax (Rashid, 2020). Strong subjective norms are also one of the determinants of tax compliance. Górecki and Letki (2021), who carried out a study involving 14 countries in Europe, found that strong perceived norms of one’s immediate reference group, often replace fines and punishment actions as a method of deterring tax noncompliance. According to a similar study by Sritharan et al. (2020), having a better positive referral group will boost a taxpayer's tax compliance on an individual basis. For example, in cases where an individual perceives that people around them, such as family members and friends, support tax compliance and view tax evasion as unethical, they will be more likely to comply with tax obligations themselves.