The Impact of Tax Awareness on Tax Compliance: Evidence from Vietnam

Thuy Nguyen Thi Le, Yen Mac Thi Hai, Tran Cuong Thi and Minh Nguyen Thi Hong

Journal of Tax Reform, 2024, vol. 10, issue 2, 214-227

Abstract: In Vietnam, tax authorities have implemented many initiatives to support administrative procedural reform with a taxpayer-centered approach, particularly the self-calculation, self-filing, and self-paying methods, where taxpayers are responsible for their tax declaration and payment. The issue is that tax evasion or compliance behavior is derived from taxpayers’ awareness. The study investigates the connection between tax awareness and tax compliance in Vietnam. This study applies a quantitative analysis with a research sample of 380 individual taxpayers employed in various industries across Vietnam. The questionnaire is sent to taxpayers by directly email and via the tax authorities. The collected data are then processed and analyzed by SPSS v.22. The study applies Cronbach’s Alpha as a tool for assessing scales’ reliability or internal consistency. The research results indicate a significant direct effect of the independent variable with the dependent variable, particularly tax awareness positively influences tax compliance and accounts for 37.3% of the variation in tax compliance. Based on the research findings, this study proposes some policy implications to enhance tax awareness and improve voluntary tax compliance behaviors including (1) conducting an overall assessment program on the current level of tax awareness and developing targeted programs for different groups of taxpayers based on those results; (2) transforming tax educational methods to improve taxpayers’ accessibility and engagement, catering to different learning preferences and technological abilities; (3) integrating tax topics into high school, university programs or in training programs for new employees; (4) promoting a culture of tax compliance through organizing tax awareness competitions and introducing rewards for taxpayers with high compliance levels.

Keywords: tax awareness; tax compliance; tax education; taxpayers; tax policy (search for similar items in EconPapers)
JEL-codes: H20 H24 H71 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:aiy:jnljtr:v:10:y:2024:i:2:p:214-227

DOI: 10.15826/jtr.2024.10.2.165

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