The issue that the study will focus on is the relationship between tax ethical beliefs and tax evasion or compliance. It will also look into the effects of individuals ethical beliefs on tax compliance decisions and how tax evasions due to ethical beliefs can be reduced or eliminated from an economy
The research will seek to answer the following questions:
What are the reasons for tax evasion?
What is the attitude of tax payers when government is perceived to be corrupt?
Is tax evasion ethically justifiable?
What is the most rampant ethical justification for tax evasion?
Do ethical values correlate highly with self reported tax compliance?
Can ethical values limit the choices considered in decision making?
Objectives of the study
The aim of this study is to determine the effect of ethical belief and principles on tax compliance. In the light of this, this research will set out to achieve the following objectives:
examine the perceived seriousness of tax evasion vis-a-vis various legal offences;
Investigate the perception of taxpayers to the payment of taxes on ethical reasons;
Identify specific key areas that taxpayers link to tax evasion; and
Examine the effect of perceived corruption in government on tax evasion.
Survey research design will be used in this study. This research strategy is considered necessary because of its ability to view comprehensively and in detail the major questions that will be raised in the study. According to Spector (1981) and Denscombe (2003), this research design is an efficient way of collecting information from a large number of respondents and the ability to use statistical techniques to determine statistical significance. The respondents who must be taxpayers will be selected randomly.
Based on previous argument collected from secondary sources of data, a questionnaire will be developed and divided into two sections, A and B. Section A will consist of several statements. Using a five- point Likert scale, respondents will be asked to indicate their agreement or disagreement with each statement (1 as strongly agree to 5 as strongly disagree). The questionnaires will be distributed in English.
Section B of the questionnaire will be designed to obtain demographic characteristics of the respondents. Questions asked in this part will relate to age, gender, marital status, level of study, major of study and whether the tax subject has been undertaken.
Questionnaires will also be used when collecting the information during the observation of the respondents. However the questionnaires used here will include open ended questions that the observer will respond to during his observation.
Both qualitative and quantitative methods will be used to analyze the data that will be collected.
The research process is expected to begin immediately after the availability of funds with the analysis of literature on the issue of ethical tax evasion that has been researched before. The collected information will enable the research team to come up with suitable questionnaires that will be used in data collection. The questionnaires will then be distributed physically to the selected respondents who will respond and return the forms after completion. The observation will be carried out correspondingly with the issuance of the questionnaires. After sufficient information has been collected based on the agreed guidelines the collected will be analyzed using the stated techniques.
The research will utilize both primary and secondary research. In primary research, the study will survey various members of the country. A structured questionnaire will be developed and used as a survey tool for the study. The questionnaire will have two parts. Section A with a 5 point Likert scale and part B with general questions about the respondent.
Participant observation will be used to collect both qualitative and quantitative data. It will involve the researcher becoming a participant in the context being observed. It will involve watching people over a period of time in naturally occurring settings and recording their behavior and actions in regards to their tax compliance behaviors.
A secondary research will also be carried out in the study. Sources in the secondary research will include previous research reports, newspapers, existing knowledge on books and journals. The interpretation will then be conducted which can account as qualitative in nature.
The sampling will be carried out in two stages. First it will be for the general public and the second for the tax officials and department who deal with the collection of tax. The first sampling technique to be used will be the random sampling. Random members of the public will be chosen to participate in the process. The second stage will use purposive sampling to sample the government officials to be involved in the research.
The secondary data will be analyzed using qualitative analysis. The primary data will be analyzed using a frequency analysis. The frequency analysis will help show the number of people in different demographic categories that believe that ethics affect tax compliance and those who do not share this view. Percentages will be calculated to show the ratio of people in the different demographic categories who share this view and those who do not. The mean and averages of the different views in the different demographic brackets will also be calculated.
The purpose of this study is to investigate tax ethics as a possible explanatory variable of tax compliance. The results of the research are expected to indicate that individual moral beliefs are highly significant in tax compliance decisions and that when tax evasion is seen as a moral issue individuals are less likely to evade taxes regardless of the tax situation.
The findings are expected to be consistent with that of Chang and Schultz (1990) who found that under withheld (tax payment due) taxpayers are more likely to not comply at all levels of income than over withheld (refund due) taxpayers. The findings are expected to contribute to tax compliance research by providing an explanation of the underlying causes of non compliance.
The Ethics of Tax Evasion. (n.d.). doi:http://www.businessteacher.org.uk/essays/accounting/the-ethics-of-tax-evasion.php
James, L., & Gwartney, D. (1987). Income tax avoidance. Evidence from individual returns.
Mcgee, R., & Pleshko, L. (2012, January 1). Ethics of tax evasion. Doi:https://www.questia.com/library/journal/1P3-2750826331/the-ethics-of-tax-evasion-an-investigation-into-demographic
Schansberg, D.E (1998). The Ethics of Tax Evasion with Biblical Christianity. Journal of Accounting, Ethics & Public Policy.
Mason, R., & Lyle D. (1984). National Tax Journal. Public Confidence and Admitted Tax Evasion.
Milliron, C., & Daniel, T. (1988). Tax Compliance. An Investigation of Key Features.
Lewis, A., (1978) . The British Tax Review. Perceptions of Tax Rates.
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