INVESTIGATING THE DETERMINANTS OF TAX MORALE OF PROSPECTIVE TAXPAYERS

ABSTRACT

This study investigates the determinants of tax morale. It examines the effect of tax knowledge, perceived fairness, religiosity, national pride and financial satisfaction on tax morale. With a sample of prospective taxpayers drawn from the regular student population of the University of Ghana, the study analyses the hypothesised relationships using the partial least square structural equation modelling technique. The results show that religiosity, national pride and perceived fairness are important predictors of tax morale. The implication of the findings is that the government can increase the tax revenues raised through the promotion of voluntary compliance by ensuring equitable distribution of the national tax burden; paying attention to national interests rather than political interests in order to boost the pride of citizens; using moral suasion through religious organisations to encourage compliance; and educating the public on the tax system. The study acknowledges that tax morale may develop overtime and recommends panel studies for future research.