No. 20




Tax Morale as an Influence on Establishing Tax Compliance and its Main Potential Individual Effects *

17 December 2009


RiTo No. 20, 2009

  • Kerly Lillemets

    Ph.D. student in public administration, Tallinn University of Technology

In most cases, tax compliance is analyzed using economic models and relevant economic interpretations.

Tax compliance in the social sciences, where a taxpayer’s payment history has been influenced by psychological factors, is quite a recent phenomenon.

In the context of complexity of assessing the nature of psycho-social factors and ambiguity of tax law, the focus therefore lies mainly on the field of supervision. It is foremost in this respect that a tax administrator carries out verification of the accuracy of tax calculations with the aim of affecting the taxpayers’ payment behaviour and ensuring the necessary percentage of tax revenue in the state budget.

However, a mere increase in tax revenue cannot be regarded as the same as improved tax compliance. A individual’s payment history cannot be established by viewing economic behaviour alone. Performance is affected by the economic, political, social factors and their combined impact as well. To conduct an assessment on tax compliance development, the writer considers the total amount of effective influence factors.

This article examines the subject of influence factors on tax morale, presents a discussion on the concept of failure to pay taxes or tax arrears and suggests ways how to improve tax morale.
Keywords: tax compliance, tax morale, arrears.

*Peer-reviewed article.

Full article in Estonian