Title: Drivers of compliance intentions: Consistent vs inconsistent taxpayers

Author
Natalia Levenko - TalTech, Department of Economics and Finance

Abstract:

This paper analyses six waves of survey data on the tax compliance of Estonian residents, collected between 2018 and 2023, to test whether the theory of planned behaviour provides an adequate framework for explaining tax compliance. The analysis uses structural equation modelling, so allowing latent constructs and observed behaviour to be jointly estimated. The intention to comply emerges as a strong and stable predictor of compliance. Actual control is significantly and negatively associated with compliance. Social norms and tax morale are robust determinants of compliance intentions, while deterrence-related variables show limited explanatory power. Attitudes toward the tax system primarily influence intentions indirectly through their effects on tax morale. Using a novel taxonomy of consistent and inconsistent taxpayers, the paper documents pronounced heterogeneity: compliance intentions are driven by intrinsic motivation and social norms among consistent taxpayers, and by institutional attitudes and external pressures among inconsistent taxpayers, with implications for targeted policy design beyond standard rational choice models.

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