A Review of Behavioral Tax Compliance Research on Economic and Non－economic Factors using Experiment
Asian Tax Journal Vol. 12 No. 3 (2011), pp. 215-273
Abstract
In the tax compliance research, the experimental method has been considered appropriate method. This study presents various factors affecting taxpayers' tax reporting decisions that have been suggested from previous behavioral accounting research using experimental method, by classifying into two categories of economic factors and non-economic factors. And then this paper reviews the research subjects, designs and results of studies related to two categories of factors. Finally, this paper suggests the direction of future studies on the tax compliance research using experiment. The economic factors in this study mostly mean the economic incentive-related variables of affecting after tax disposable incomes, and include tax institutional factors(sanction, tax administration and tax-related information, rewards and tax system) and individual economic-environmental factors(income level and income source). On the other hand, the non-economic factors in this paper include personal factors(demographic characteristics), psychological factors(attitude and cognition), and social and cultural factors(social norm, moral suasion). The directions for future research by reviewing the precedent studies are as follows ;First, fiscal variables mainly included in economic variables are found to be studied by focusing on particular factors in previous studies. Accordingly, studies are required on the policies which were not analyzed in precedent studies but tax authority has adopted currently, or may adopt in future. For example, research on audit scheme, taxpayers' responses when information level or disclosure method is different, or changes of taxpayers' tax reporting decisions after audit. These studies may suggest meaningful implications for tax authority's policies on audit schemes, audit scheme disclosure and post control of audit. Second, recent studies emphasize importance of non-economic factors, In particular, many researchers have argued that tax morale can help explain the tax compliance, If the moral suasions influence tax compliance, the research on the persistence of the effect are required. Third, studies on action effects of inter-economic factors, inter-non-economic factors, and between economic factors and non-conomic factors are required. Finally, in comprehensive consideration of variables having meaningful effects to tax compliance suggested in previous paper, further studies on tax payment decisions on a wider viewpoint are required.
Keywords
- Tax reporting decision
- Experimental studies
- Tax compliance
- Behavioral tax accounting research