Tax Morale, Tax Rate and Voluntary Personal Income Tax Compliance Post-COVID-19 Pandemic: Evidence from Vietnam

Thi Lam Anh Nguyen; Duy Anh Tran; Hoang Hai Nguyen

doi:10.18535/ijsrm/v13i04.em05

Abstract

This study investigates the factor influence of voluntary personal income tax (PIT) compliance in the Vietnam context post Covid 19 with perception of fairness as a mediating variable and tax rate as a moderating variable. The research data were collected on the Google Form platform, with 300 responses forwarded to the participants from November 1, 2024, and December 31, 2024. SmartPLS 3 was used to test this relationship in the proposed hypotheses. This study found the existence of all proposed relationships. A highlight of the study proved the existence of the mediating variable, perception of fairness, and the moderating variable, tax rate. However, the relationship between the tax rate and voluntary tax compliance shows the opposite result. Based on these results, the authors provide valuable suggestions to taxpayers and policymakers to improve PIT compliance in Vietnam.

Keywords

Tax ratetax moralevoluntary tax complianceperception about governmentperception of fairness1

References

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Barbuta-Misu, N. (2011). A review of factors for tax compliance. Economics and Applied Informatics, (1), 69–76. https://ideas.repec.org/a/ddj/fseeai/y2011i1p69-76.html?Google Scholar ↗
Braithwaite, V. (2003). Taxing democracy: Understanding tax avoidance and evasion. Ashgate PublishingGoogle Scholar ↗
Chau, G., & Leung, P. (2009). A critical review of Fischer tax compliance model: A research synthesis. Journal of Accounting and Taxation, 1(2), 34–40. Retrieved from https://academicjournals.org/journal/JAT/article-full-text-pdf/DC1EDBE673Google Scholar ↗
Chin, W. W., & Newsted, P. R. (1999). Structural equation modeling analysis with small samples using partial least squares. In R. H. Hoyle (Ed.), Statistical strategies for small sample research (pp. 307–341). Sage Publications.Google Scholar ↗
Cummings, R. G., Martinez-Vazquez, J., McKee, M., & Torgler, B. (2009). Tax morale affects tax compliance: Evidence from surveys and an artefactual field experiment. Journal of Economic Behavior & Organization, 70(3), 447–457. https://doi.org/10.1016/j.jebo.2008.02.010DOI ↗Google Scholar ↗
DeVellis, R. F. (2017). Scale development: Theory and applications (4th ed.). Sage Publications.Google Scholar ↗
Deyganto, K. O. (2018). Factors influencing taxpayers' voluntary compliance attitude with tax system: Evidence from Gedeo Zone of Southern Ethiopia. Universal Journal of Accounting and Finance, 6(3), 92–107. https://doi.org/10.13189/ujaf.2018.060302DOI ↗Google Scholar ↗
Garson, G. D. (2016). Partial Least Squares Regression and Structural Equation Models. Statistical Associates PublishingGoogle Scholar ↗
Gilligan, G., & Richardson, G. (2005). Perceptions of tax fairness and tax compliance in Australia and Hong Kong: A preliminary study. Journal of Financial Crime, 12(4), 331–343. https://doi.org/10.1108/13590790510624783DOI ↗Google Scholar ↗
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Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In R. R. Sinkovics & P. N. Ghauri (Eds.), New Challenges to International Marketing (Vol. 20, pp. 277–319). Emerald Group Publishing Limited. https://doi.org/10.1108/S1474-7979(2009)0000020014DOI ↗Google Scholar ↗
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Hofmann, E., Hoelzl, E., & Kirchler, E. (2008). Preconditions of voluntary tax compliance: Knowledge and evaluation of taxation, norms, fairness, and motivation to cooperate. Zeitschrift für Psychologie, 216(4), 209–217. https://doi.org/10.1027/0044-3409.216.4.209DOI ↗Google Scholar ↗
Kelley, H. H., & Michela, J. L. (1980). Attribution theory and research. Annual Review of Psychology, 31(1), 457–501. https://doi.org/10.1146/annurev.ps.31.020180.002325DOI ↗Google Scholar ↗
Kirchgässner, G. (2011). Tax morale, tax evasion, and the shadow economy. In F. Schneider (Ed.), Handbook on the Shadow Economy (pp. 347–374). Edward Elgar PublishingGoogle Scholar ↗
Lisi, G. (2015). Tax morale, tax compliance and the optimal tax policy. Economic Analysis and Policy, 45, 27–32. https://doi.org/10.1016/j.eap.2014.12.004DOI ↗Google Scholar ↗
Mas'ud, A., Aliyu, A. A., & Gambo, E.-M. J. (2014). Tax rate and tax compliance in Africa. European Journal of Accounting, Auditing and Finance Research, 2(3), 22–30. Retrieved from https://www.researchgate.net/publication/284435538_TAX_RATE_AND_TAX_COMPLIANCE_IN_AFRICAGoogle Scholar ↗
Mukhlis, I., Utomo, S. H., & Soesetyo, Y. (2014). Increasing tax compliance through strengthening capacity of education sector for export oriented SMEs handicraft field in East Java Indonesia. European Scientific Journal, 10(7), 170–184. https://eujournal.org/index.php/esj/article/view/2975/2799Google Scholar ↗
Nguyen, T. H. (2022). The impact of non-economic factors on voluntary tax compliance behavior: A case study of small and medium enterprises in Vietnam. Economies, 10(8), 179. https://doi.org/10.3390/economies10080179DOI ↗Google Scholar ↗
Palil, M. R. (2010). Tax knowledge and tax compliance determinants in self-assessment system in Malaysia (Doctoral dissertation, University of Birmingham). Retrieved from https://etheses.bham.ac.uk/id/eprint/1040/Google Scholar ↗
Palil, M. R., & Mustapha, A. F. (2011). The evolution and concept of tax compliance in Asia and Europe. Australian Journal of Basic and Applied Sciences, 5(11), 557–563. Retrieved from https://www.ajbasweb.com/old/ajbas/2011/November-2011/557-563.pdfGoogle Scholar ↗
Piliavin, J. A., & Charng, H.-W. (1990). Altruism: A review of recent theory and research. Annual Review of Sociology, 16(1), 27–65. https://doi.org/10.1146/annurev.so.16.080190.000331DOI ↗Google Scholar ↗
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Wahl, I., Kastlunger, B., & Kirchler, E. (2010). Trust in authorities and power to enforce tax compliance: An empirical analysis of the “slippery slope framework.” Law & Policy, 32(4), 383–406. https://doi.org/10.1111/j.1467-9930.2010.00327.xDOI ↗Google Scholar ↗
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[refR-2] Alm, J., & Torgler, B. (2011). Do ethics matter? Tax compliance and morality. Journal of Business Ethics, 101(4), 635–651. https://doi.org/10.1007/s10551-011-0761-9DOI ↗Google Scholar ↗

[refR-3] Assfaw, A. M., & Sebhat, W. (2019). Analysis of tax compliance and its determinants: Evidence from Kaffa, Bench Maji and Sheka Zones Category B tax payers, SNNPR, Ethiopia. Journal of Accounting, Finance and Auditing Studies, 5(1), 32–58. https://doi.org/10.32602/jafas.2019.2DOI ↗Google Scholar ↗

[refR-4] Azemi, A. B., Palil, M. R., Mohd Amir, A., & Muhammad Said, S. (2020). Tax fairness in a developing country: Perceptions of Malaysian tax agents. Management & Accounting Review, 19(1), 49–72. Retrieved from https://ir.uitm.edu.my/id/eprint/31040/Google Scholar ↗

[refR-5] Barbuta-Misu, N. (2011). A review of factors for tax compliance. Economics and Applied Informatics, (1), 69–76. https://ideas.repec.org/a/ddj/fseeai/y2011i1p69-76.html?Google Scholar ↗

[refR-6] Braithwaite, V. (2003). Taxing democracy: Understanding tax avoidance and evasion. Ashgate PublishingGoogle Scholar ↗

[refR-7] Chau, G., & Leung, P. (2009). A critical review of Fischer tax compliance model: A research synthesis. Journal of Accounting and Taxation, 1(2), 34–40. Retrieved from https://academicjournals.org/journal/JAT/article-full-text-pdf/DC1EDBE673Google Scholar ↗

[refR-8] Chin, W. W., & Newsted, P. R. (1999). Structural equation modeling analysis with small samples using partial least squares. In R. H. Hoyle (Ed.), Statistical strategies for small sample research (pp. 307–341). Sage Publications.Google Scholar ↗

[refR-9] Cummings, R. G., Martinez-Vazquez, J., McKee, M., & Torgler, B. (2009). Tax morale affects tax compliance: Evidence from surveys and an artefactual field experiment. Journal of Economic Behavior & Organization, 70(3), 447–457. https://doi.org/10.1016/j.jebo.2008.02.010DOI ↗Google Scholar ↗

[refR-10] DeVellis, R. F. (2017). Scale development: Theory and applications (4th ed.). Sage Publications.Google Scholar ↗

[refR-11] Deyganto, K. O. (2018). Factors influencing taxpayers' voluntary compliance attitude with tax system: Evidence from Gedeo Zone of Southern Ethiopia. Universal Journal of Accounting and Finance, 6(3), 92–107. https://doi.org/10.13189/ujaf.2018.060302DOI ↗Google Scholar ↗

[refR-12] Garson, G. D. (2016). Partial Least Squares Regression and Structural Equation Models. Statistical Associates PublishingGoogle Scholar ↗

[refR-13] Gilligan, G., & Richardson, G. (2005). Perceptions of tax fairness and tax compliance in Australia and Hong Kong: A preliminary study. Journal of Financial Crime, 12(4), 331–343. https://doi.org/10.1108/13590790510624783DOI ↗Google Scholar ↗

[refR-14] Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203DOI ↗Google Scholar ↗

[refR-15] Hardika, N. S., Wicaksana, K. A. B., & Subratha, I. N. (2021). The impact of tax knowledge, tax morale, tax volunteer on tax compliance. In Proceedings of the International Conference on Applied Science and Technology on Social Science (ICAST-SS 2020) (pp. 98–103). Atlantis Press. https://doi.org/10.2991/assehr.k.210424.020DOI ↗Google Scholar ↗

[refR-16] Hassan, I., Naeem, A., & Gulzar, S. (2021). Voluntary tax compliance behavior of individual taxpayers in Pakistan. Financial Innovation, 7(1), 21. https://doi.org/10.1186/s40854-021-00234-4DOI ↗Google Scholar ↗

[refR-17] Helhel, Y., & Ahmed, Y. S. S. (2014). Factors affecting tax attitudes and tax compliance: A survey study in Yemen. European Journal of Business and Management, 6(22), 48–58. Retrieved from https://www.researchgate.net/publication/270338082_Factors_Affecting_Tax_Attitudes_and_Tax_Compliance_A_Survey_Study_in_YemenGoogle Scholar ↗

[refR-18] Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In R. R. Sinkovics & P. N. Ghauri (Eds.), New Challenges to International Marketing (Vol. 20, pp. 277–319). Emerald Group Publishing Limited. https://doi.org/10.1108/S1474-7979(2009)0000020014DOI ↗Google Scholar ↗

[refR-19] Höck, M., & Ringle, C. M. (2010). Local strategic networks in the software industry: An empirical analysis of the value continuum. International Journal of Knowledge Management Studies, 4(2), 132–151. https://doi.org/10.1504/IJKMS.2010.030789DOI ↗Google Scholar ↗

[refR-20] Hofmann, E., Hoelzl, E., & Kirchler, E. (2008). Preconditions of voluntary tax compliance: Knowledge and evaluation of taxation, norms, fairness, and motivation to cooperate. Zeitschrift für Psychologie, 216(4), 209–217. https://doi.org/10.1027/0044-3409.216.4.209DOI ↗Google Scholar ↗

[refR-21] Kelley, H. H., & Michela, J. L. (1980). Attribution theory and research. Annual Review of Psychology, 31(1), 457–501. https://doi.org/10.1146/annurev.ps.31.020180.002325DOI ↗Google Scholar ↗

[refR-22] Kirchgässner, G. (2011). Tax morale, tax evasion, and the shadow economy. In F. Schneider (Ed.), Handbook on the Shadow Economy (pp. 347–374). Edward Elgar PublishingGoogle Scholar ↗

[refR-23] Lisi, G. (2015). Tax morale, tax compliance and the optimal tax policy. Economic Analysis and Policy, 45, 27–32. https://doi.org/10.1016/j.eap.2014.12.004DOI ↗Google Scholar ↗

[refR-24] Mas'ud, A., Aliyu, A. A., & Gambo, E.-M. J. (2014). Tax rate and tax compliance in Africa. European Journal of Accounting, Auditing and Finance Research, 2(3), 22–30. Retrieved from https://www.researchgate.net/publication/284435538_TAX_RATE_AND_TAX_COMPLIANCE_IN_AFRICAGoogle Scholar ↗

[refR-25] Mukhlis, I., Utomo, S. H., & Soesetyo, Y. (2014). Increasing tax compliance through strengthening capacity of education sector for export oriented SMEs handicraft field in East Java Indonesia. European Scientific Journal, 10(7), 170–184. https://eujournal.org/index.php/esj/article/view/2975/2799Google Scholar ↗

[refR-26] Nguyen, T. H. (2022). The impact of non-economic factors on voluntary tax compliance behavior: A case study of small and medium enterprises in Vietnam. Economies, 10(8), 179. https://doi.org/10.3390/economies10080179DOI ↗Google Scholar ↗

[refR-27] Palil, M. R. (2010). Tax knowledge and tax compliance determinants in self-assessment system in Malaysia (Doctoral dissertation, University of Birmingham). Retrieved from https://etheses.bham.ac.uk/id/eprint/1040/Google Scholar ↗

[refR-28] Palil, M. R., & Mustapha, A. F. (2011). The evolution and concept of tax compliance in Asia and Europe. Australian Journal of Basic and Applied Sciences, 5(11), 557–563. Retrieved from https://www.ajbasweb.com/old/ajbas/2011/November-2011/557-563.pdfGoogle Scholar ↗

[refR-29] Piliavin, J. A., & Charng, H.-W. (1990). Altruism: A review of recent theory and research. Annual Review of Sociology, 16(1), 27–65. https://doi.org/10.1146/annurev.so.16.080190.000331DOI ↗Google Scholar ↗

[refR-30] Saad, W. (2011). Assessing sustainability of Lebanese public debt: A cointegration analysis approach. International Research Journal of Finance and Economics, 62, 58–74. Retrieved from https://www.researchgate.net/publication/280591761_Assessing_Sustainability_of_Lebanese_Public_Debt_A_cointegration_Analysis_ApproachGoogle Scholar ↗

[refR-31] Saptono, P. B., & Khozen, I. (2023). What determines the tax compliance intention of individual taxpayers receiving COVID-19-related benefits? Insights from Indonesia. International Journal of Sociology and Social Policy, 43(11–12), 1190–1217. https://doi.org/10.1108/IJSSP-02-2023-0045DOI ↗Google Scholar ↗

[refR-32] Taing, H. B., & Chang, Y. (2021). Determinants of tax compliance intention: Focus on the theory of planned behavior. International Journal of Public Administration, 44(1), 62–73. https://doi.org/10.1080/01900692.2020.1728313DOI ↗Google Scholar ↗

[refR-33] Tehulu, T. A., & Dinberu, Y. D. (2014). Determinants of tax compliance behavior in Ethiopia: The case of Bahir Dar city taxpayers. Journal of Economics and Sustainable Development, 5(15), 268–273. https://core.ac.uk/download/pdf/234646522.pdfGoogle Scholar ↗

[refR-34] Wahl, I., Kastlunger, B., & Kirchler, E. (2010). Trust in authorities and power to enforce tax compliance: An empirical analysis of the “slippery slope framework.” Law & Policy, 32(4), 383–406. https://doi.org/10.1111/j.1467-9930.2010.00327.xDOI ↗Google Scholar ↗

[refR-35] Zamudio, A.F.R., & Cama, J.L.N. (2020). (PDF) Assessment of fiscal effort and voluntary tax compliance in Peru. ResearchGate [Preprint]. https://doi.org/10.14718/revfinanzpolitecon.v12.n1.2020.3121DOI ↗Google Scholar ↗