1. To Pay or Not to Pay? Business Owners’ Tax Morale: Testing a Neo-Institutional Framework in a Transition Environment
- Author
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Tomasz Mickiewicz, Arnis Sauka, and Anna Rebmann
- Subjects
Economics and Econometrics ,Entrepreneurship ,Double taxation ,Public economics ,Informal sector ,business.industry ,05 social sciences ,06 humanities and the arts ,Public relations ,Tax reform ,0603 philosophy, ethics and religion ,Tax avoidance ,General Business, Management and Accounting ,Arts and Humanities (miscellaneous) ,0502 economics and business ,State income tax ,Economics ,Survey data collection ,060301 applied ethics ,Business and International Management ,Business ethics ,business ,Law ,050203 business & management - Abstract
In order to understand how the environment influences business owner/managers’ attitudes towards tax morale, we build a theoretical model based on a neo-institutionalist framework. Our model combines three complementary perspectives on institutions—normative, cultural–cognitive and regulatory–instrumental. This enables a broader understanding of factors that influence business owner–managers’ attitudes towards tax evasion. We test the resulting hypotheses using regression analysis on survey data on business owner/managers in Latvia—a transition country, which has undergone massive institutional changes since it was part of the Soviet Union over 25 years ago. We find that legitimacy of the tax authorities and the government (normative dimension), feeling of belonging to the nation (cultural–cognitive dimension) and perceptions of the risk and severity of punishment (regulatory–instrumental dimension) are all associated with higher tax morale for business owners and managers.
- Published
- 2017