| Pub. Date | : October, 2023 |
|---|---|
| Product Name | : The IUP Journal of Accounting Research and Audit Practices |
| Product Type | : Article |
| Product Code | : IJARAP041023 |
| Author Name | : Swathy Krishna and Shacheendran V |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 15 |
Tax compliance is a significant means for ensuring better revenue performance. Many studies have adopted Theory of Planned Behavior (TPB) to investigate the factors influencing taxpayers' compliance intention, but there exists limited literature on consumers' compliance intention towards consumption taxes. Hence, this study seeks to analyze the influence of attitude, subjective norm, perceived behavioral control and moral obligation on consumers' compliance intention. The study used data collected from 186 consumers from Kerala state through an online survey. The result of PLS-SEM analysis revealed a significant influence of the selected variables on the consumers' compliance intention towards consumption taxes, which underscores the need for the government officials to provide due consideration to improving consumer perception in order to bring down the tax gap existing in the economy.
Tax evasion has been a major concern for the administrative system across developed and developing economies. Significant increase in tax avoidance/evasion practices can be observed across the nation over the years. Taxpayers have been adopting different types of tax evasion practices in order to pay as little tax as possible. Such unfair practices have created serious concerns for the administrative system (McGee, 1999). By 2020, India's shadow economy constituted 15.7% of the GDP (ACCA Global, 2021). The tax gap caused by unfair business practices will increase the fiscal deficit, which could become a bottleneck for economic progress. The government authorities at different tiers are working rigorously to reduce the tax gap existing in the economy. The growing reluctance to pay taxes on the part of taxpayers has created an uncomfortable situation for the administrative officials. Numerous studies have explored the compliance intention of individuals (Efebera el al., 2004; Shaharuddin et al., 2012; Saad and Haniffa, 2014; and Taing and Chang, 2021). The concept of tax compliance has been explored from multiple dimensions using different models. Some studies used Theory of Planned Behavior (TPB) (Bobek and Hatfield, 2003; and Taing and Chang, 2021) and some used Theory of Reasoned Action to measure compliance intention (Bidin and Shamsudin, 2013; and Adams, 2014). But the existing literature mainly focuses on dealers' compliance intention, and there exists only limited knowledge on consumers' perspective. Hence, the present study examines consumers' compliance intention towards consumption taxes in Kerala, using extended model theory of planned behavior (Ajzen, 1991). Even with the longstanding history of taxation in India, there exists only limited knowledge on tax compliance intention of consumers towards consumption taxes, which this study seeks to address.