Investigating the Impact of Tax Awareness on Tax Compliance and Non-economic Determinants
Abstract
This study examines the mediating effect of awareness of tax between four non-economic determinants, Tax Morale (TM), National Pride (NP), Tax Compliance (TS), Quality of Tax Service (QTS), and Tax Knowledge (TK), among the population (n=1080) of individual taxpayers in Shenzhen, China. Partial Least Squares - Structural Equation Modelling (PLS-SEM) software (version 4) from SmartPLS was used to analyse the proposed relationships. The model obtained had high reliability and good convergent validity, and the overall model had a satisfactory fit. The results show that all four antecedents were significant and explained about 29% of the variance in the dependent variable, Tax Awareness. National pride has the lowest impact, followed by quality of tax service and tax knowledge, while tax morale has the highest impact. Among the factors affecting Tax Compliance, only Quality of Tax Service and Tax Morale had significant influence, while the influence of Tax Knowledge, National Pride, and Tax Awareness was not statistically significant. The direct effect of Tax Awareness on Tax Compliance was very little, and the indirect effect was not found. The results indicate that quality of service and taxpayers' internal moral commitment account for significant direct factors affecting voluntary tax compliance, while Tax Awareness seems to be more of a result of knowledge, institutional experience and civic values than a factor connecting these values with the tax compliance behaviour.
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References
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