Tax Compliance Challenge through Taxpayers’ Typology

Hana Paleka () and Vanja Vitezić ()
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Hana Paleka: Faculty of Tourism and Hospitality Management, University of Rijeka, Naselje Ika, Primorska 46, HR-51410 Opatija, Croatia

Economies, 2023, vol. 11, issue 9, 1-17

Abstract: Tax compliance has become a very popular academic research topic. Understandably so, as all modern societies face the challenge of limiting tax evasion and the losses this phenomenon causes to government revenues. Given the increase in duties in the aftermath of the economic downturn affected by COVID-19, increasing taxpayer compliance is one of the main tasks for governments worldwide. This study aimed to identify critical gaps in understanding taxpayer heterogeneity. For this purpose, an exploratory factor analysis of taxpayer perceptual and attitudinal elements was carried out. Our analysis revealed six factors influencing taxpayer compliance with the tax system. Furthermore, the cluster analysis identified four groups of taxpayers, and significant differences between the clusters and the descriptive profile of each cluster were also found. The specificities of these clusters point to a conclusion that the time has come for policy makers to employ strategies that stimulate voluntary tax compliance with minimum cost to the tax system.

Keywords: tax compliance; tax evasion; economic determinants; psychological determinants; taxpayer segmentation (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
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