Emotions and tax compliance among small business owners: An experimental survey
- Author(s)
- Jerome Olsen, Matthias Kasper, Janina Enachescu, S. Benk, T. Budak, Erico Kirchler
- Abstract
Tax authorities’ power to enforce compliance as well as taxpayers’ trust in the tax agency shape taxpayers’ compliance behavior. But while financial decisions often trigger strong emotional responses, little is known about the relation between taxpayers’ emotions and their compliance choices. We hypothesize that emotions mediate the relationship between the perception of tax authorities and intended tax compliance. In a scenario-based experiment with 411 self-employed Turkish taxpayers, we find that highlighting authorities’ enforcement capacity (i.e. high power) induces negative emotions while elevating enforced compliance and the readiness to evade. Trust, on the other hand, reduces negative emotions and raises positive feelings, which are associated with intentions to comply voluntarily. Moreover, a combination of high power and high trust reduces negative feelings and increases intentions to comply while undermining the readiness to evade. Our findings suggest that emotions matter in shaping compliance. Specifically, enforcement efforts that induce negative emotions might have negative compliance implications.
- Organisation(s)
- Department of Occupational, Economic and Social Psychology
- External organisation(s)
- Inonu University
- Journal
- International Review of Law and Economics
- Volume
- 56
- Pages
- 42-52
- No. of pages
- 11
- ISSN
- 0144-8188
- DOI
- https://doi.org/10.1016/j.irle.2018.05.004
- Publication date
- 12-2018
- Peer reviewed
- Yes
- Austrian Fields of Science 2012
- 501029 Economic psychology
- Keywords
- ASJC Scopus subject areas
- Economics and Econometrics, Law, Finance
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/emotions-and-tax-compliance-among-small-business-owners-an-experimental-survey(00aac3a1-51dc-49a1-ac35-7327d16f8ca7).html