<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Income tax non-compliance is worldwide delinquent and with the small volume of income tax collection Bangladesh has been facing its demerits for a long time. There is still a gap to measure income tax non-compliance behaviour in a micro direct approach. This study uses EVSCALE instrument to calculate the individual income tax non-compliance as a latent variable. The instrument consists of 15 items in Likert scale to measure the non-compliance behaviour of a person. The objective of this study is to identify the determinants of income tax non-compliance and key factors of EVSCALE in Bangladesh. The study collected opinions of taxpayers by primary data collection following a convenient sampling method. Logit regression analysis finds out that log monthly income, tax morale, tax education and occupation significantly influence income tax non-compliance. Exploratory factor analysis identifies six key factors that have consistency and shared variance. However, Cronbach’s alpha shows that five key factors have high reliability among six factors. According to rules of thumb, this study suggests that EVSCALE instrument needs modification by adding more items. This study argues that increasing participation in taxation system is a feasible policy for government instead of increasing tax rate.</p></abstract>

Income tax non-compliance is worldwide delinquent and with the small volume of income tax collection Bangladesh has been facing its demerits for a long time. There is still a gap to measure income tax non-compliance behaviour in a micro direct approach. This study uses EVSCALE instrument to calculate the individual income tax non-compliance as a latent variable. The instrument consists of 15 items in Likert scale to measure the non-compliance behaviour of a person. The objective of this study is to identify the determinants of income tax non-compliance and key factors of EVSCALE in Bangladesh. The study collected opinions of taxpayers by primary data collection following a convenient sampling method. Logit regression analysis finds out that log monthly income, tax morale, tax education and occupation significantly influence income tax non-compliance. Exploratory factor analysis identifies six key factors that have consistency and shared variance. However, Cronbach’s alpha shows that five key factors have high reliability among six factors. According to rules of thumb, this study suggests that EVSCALE instrument needs modification by adding more items. This study argues that increasing participation in taxation system is a feasible policy for government instead of increasing tax rate.

Examining Different Factors of Income Tax Non-Compliance in a Small Sample in Bangladesh

Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Income tax non-compliance is worldwide delinquent and with the small volume of income tax collection Bangladesh has been facing its demerits for a long time....

Examining Different Factors of Income Tax Non-Compliance in a Small Sample in Bangladesh

Published Online: Feb 28, 2019

Page range: 35 - 49

DOI: https://doi.org/10.2478/eb-2019-0003

Keywords
Income Tax Non-Compliance, Tax Morale, Tax Education, EVSCALE, Exploratory Factor Analysis, Bangladesh

© 2019 Ashir In Tishar, Syed Hasanuzzaman, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Examining Different Factors of Income Tax Non-Compliance in a Small Sample in Bangladesh

Published Online: Feb 28, 2019

Page range: 35 - 49

DOI: https://doi.org/10.2478/eb-2019-0003

KeywordsIncome Tax Non-Compliance, Tax Morale, Tax Education, EVSCALE, Exploratory Factor Analysis, Bangladesh

© 2019 Ashir In Tishar, Syed Hasanuzzaman, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
Income Tax Non-Compliance, Tax Morale, Tax Education, EVSCALE, Exploratory Factor Analysis, Bangladesh