Trust and Power as Determinants of Tax Compliance in Asia: A Cross-Country Analysis
DOI:
https://doi.org/10.22452/AJAP.vol12no2.3Keywords:
Power, Slippery Slope Framework, Tax Compliance, TrustAbstract
Research aim: Prior to the emergence of the “Slippery Slope Framework”, studies on factors influencing tax compliance considered many independent variables. However, the framework simplified the tax compliance model in a parsimonious way with only two independent variables capable of explaining tax compliance. These are trust in authority and power of authority. In this study, an attempt is made to test the assumptions of the framework using cross-country data with a larger sample from Asia.
Design/ Methodology/ Approach: A cross-sectional data from 41 Asian countries was generated and analysed through Ordinary Least Squares (OLS) regression analysis.
Research finding: From the analysis, trust was found to have a significant influence on tax compliance across the countries investigated, while the power of authority was found to be weak in that regard. The interaction between the two variables in explaining tax compliance was also found to be weak across the sampled countries.
Theoretical contribution/ Originality: Theoretically, the study supports not only the “Slippery Slope Framework” but also Social Exchange Theory as it shows that in social exchange contract such as paying tax by taxpayers and providing public goods and services by the central government. Trust plays an important role as taxpayers expect reciprocation.
Practitioner/ Policy implication: The result highlights to the policymakers in 41 Asian countries that improving tax compliance requires a high level of trust from authorities. Taxpayers seek the judicious use of taxpayers’ money in executing projects and services needed by the nation.
Research limitation/ Implication: Considering additional factors such as antecedents of trust and power will add to the explanation of tax compliance using the framework.
Keywords: Power, Slippery Slope Framework, Tax Compliance, Trust
Type of article: Research paper
JEL Classification: H24, H25, H26
Downloads
Published
Issue
Section
License
License
The Asian Journal of Accounting Perspectives (AJAP) articles are published under a licence equivalent to the Creative Commons Attribution-NonCommercial-NoDerivs License (CC BY-NC-ND). The licence allows users to copy, distribute, and transmit an article as long as the author is attributed. The article is not used for commercial purposes. The work is not modified or adapted in any way.
Copyright
Authors are required to sign the Exclusive License to Publish agreement upon publication in the AJAP. The agreement grants the Publisher (Faculty of Business and Accountancy, Universiti Malaya) to publish and disseminate the articles.
Open Access
Articles published in the AJAP are digital, online, free of charge, and free of most copyright and licensing restrictions.
Article Processing Charge
Articles publish in AJAP is free submission, production and publication charges. However, all accepted articles are required for language editing. The AJAP officially appointed and outsourced proofreader will conduct this process, and the authors will cover the cost. AJAP does not profit from this process and transaction.
