Title: Different paths to tax compliance: Evidence from the Theory of planned behaviour

Author
Natalia Levenko - TalTech, Department of Economics and Finance

Abstract:

This paper analyses six waves of survey data on tax compliance among Estonian residents collected between 2018 and 2023 to test whether the Theory of Planned Behaviour provides an adequate framework for explaining tax compliance and the mechanisms implied by the theory vary across taxpayer types. The analysis is implemented using structural equation modelling, allowing the joint estimation of latent constructs and observed behaviour. Consistent with the theory, intentions to comply emerge as a strong and stable predictor of compliance behaviour. Actual control, captured by self-employment status, is significantly and negatively associated with compliance. Social norms and tax morale are robust determinants of compliance intentions, while traditional deterrence-related variables show limited explanatory power. Attitudes toward the tax system influence intentions primarily indirectly, through their effects on social norms and tax morale. The results also reveal pronounced heterogeneity: among consistent taxpayers, compliance intentions are primarily driven by intrinsic motivation and social norms, while for inconsistent taxpayers, institutional attitudes and external pressures play a stronger role. These findings suggest that compliance is largely intention-driven, but that its underlying mechanisms differ systematically across behavioural types, with implications for targeted policy design beyond standard rational choice approaches.

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