DefinePK hosts the largest index of Pakistani journals, research articles, news headlines, and videos. It also offers chapter-level book search.
Title: Government Trust as a Significant Determinant of Tax Compliance: A Study of Pakistan
Authors: Nabila Saddaf, Muhammad Tariq Mehmood, Adnan Pitafi, Shahbaz Husain
Journal: Journal of Applied Economics and Business Studies
Publisher: Abdul Wali Khan University, Mardan
Country: Pakistan
Year: 2022
Volume: 6
Issue: 2
Language: English
DOI: 10.34260/jaebs.626
Keywords: ComplianceGovernment trusttax justice perception
Tax compliance behavior of individuals is ascertained in this research. Among the variables which affect the tax compliance behavior, government trust and tax justice perception are studied. 300 individuals were taken as sample from Pakistan to study the relationship between variables of government trust, tax compliance and tax justice perception. Data is obtained through questionnaire and analyzed using reliability test, correlation and regression analysis. The results of the study showed that tax justice perception and government trust are the major determinants of tax compliance behavior in Pakistan. Tax justice perception plays the role of mediator through government trust to enhance tax compliance. Study implicates some useful suggestion that government should always put efforts in gaining public trust by increasing public services, making tax system understandable for everyone by making documentation easier so that more and more people can obey the rules which can increase compliance level.
To ascertain the tax compliance behavior of individuals in Pakistan by studying the influence of government trust and tax justice perception.
Quantitative research using a questionnaire-based survey administered to 300 individuals in Pakistan. Data was analyzed using reliability tests, correlation, and regression analysis.
graph TD;
A[Data Collection via Questionnaire] --> B[Data Analysis: Reliability, Correlation, Regression];
B --> C[Hypothesis Testing];
C --> D[Results Interpretation];
D --> E[Conclusion and Recommendations];
The study highlights that building public trust through improved public services and simplified tax documentation is crucial for increasing tax compliance. It suggests that while economic factors are important, non-economic variables like trust and perceived fairness play a dominant role. The findings indicate that in Pakistan, trust in government leads to a perception of tax justice, which in turn influences compliance, a dynamic potentially influenced by cultural aspects.
Tax justice perception and government trust are significant determinants of tax compliance behavior in Pakistan. Tax justice perception acts as a mediator, enhancing tax compliance through government trust. Demographic variables like age, marital status, and gender showed insignificant or mixed results in influencing tax compliance, with gender having a positive and significant effect on tax justice perception.
Increasing government trust is a key strategy for improving tax compliance, which directly leads to higher government revenue. Governments should focus on enhancing public services and simplifying tax processes to foster trust and fairness, thereby boosting compliance levels.
- Tax revenue of Pakistan in 2021 was 5.7% (Tax report by FBR 2021).
- 300 individuals were taken as a sample from Pakistan.
- The KMO value obtained with EFA was 0.688.
Loading PDF...
Loading Statistics...