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Voluntary Tax Compliance and the Slippery Slope Framework

Sohail Saeed, Zulaiha A. Zubair and Areeba Khan

Journal of Accounting and Finance in Emerging Economies, 2020, vol. 6, issue 2, 571-582

Abstract: Purpose__ The research provides an insight in to the most popular debate around the globe about tax compliance. The research focusses on SMEs in premises of Bahawalpur division, Pakistan, by proposing a reliable solution for interstitial gaps existing between tax authorities and compliance behavior of taxpayers. It expands the Fisher model of compliance (1992) and deploys it as a base by adding new variables namely Power of authority, Tax audit and Electronic filing. The data has been statistically analyzed by using SPSS through running test of correlation and regression. Positive correlation and causation were established among variable leads to analysis of data through Ordinary Least Square (OLS), which ratify the role of attitude and perception as moderator in overall relationship. Results show that Power of authority directly influence compliance behavior while other two variables indirectly effects the relationship through moderator, thus nurturing the voluntary behavior of taxpayer.Design/Methodology/Approach___ A research framework has been developed for identifying the effect of different factors which may in boosting up compliance behavior of taxpayers. Quantitative approach was used and data has been collected through Questionnaire from almost 50 SMEs of Bahawalpur Division.Implications___ Policy makers may use the findings of the study to encourage voluntary compliance from the non-tax paying SME. Further study can be expanded by increasing sample size and by gathering detailed information for tax authorities.Originality/Value___ The proposed Model and findings may contribute in paving path for increasing voluntary compliance. Research also emphasize on other factors which should be focused for improvement and could play a &crucial role in compliance.

Keywords: Voluntary compliance Behavior; Small and Medium Enterprises (SMEs); Fisher Model of Compliance (1992); Electronic filing; Tax Audit; Slippery Slope Framework (search for similar items in EconPapers)
Date: 2020
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DOI: 10.26710/jafee.v6i2.1253

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Handle: RePEc:src:jafeec:v:6:y:2020:i:2:p:571-582