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Overview of Research Methods Applied in Tax Compliance Behavior Research


Thus , research on the influence of (i) social psychological factors (tax spirit, subjective norms, perceptions of fairness, perceptions of tax authority power, tax awareness, trust in tax authorities); (ii) institutional factors (tax complexity, tax information); (iii) economic factors (penalties, likelihood of being audited, tax inspected); (iv) demographic factors (age, gender, education level); (v) other factors (income, number of years in business) on tax compliance behavior of individual business households in craft villages in Vietnam will: (1) ensure the inheritance of the results of previous studies when combining both economic and non-economic factors, and these are factors that many studies have applied in the study of the influence of factors on tax compliance behavior; (2) The research results will help narrow the gap in the influence of factors on taxpayers' tax compliance behavior. Because these are factors that previous research results have not yet fully agreed on the influence (positive or negative; direct or indirect; or there is no basis to confirm the relationship) of that factor on taxpayers' tax compliance behavior.

1.4. Overview of research methods applied in research on tax compliance behavior

Tax compliance is perhaps the most neutral term to describe taxpayers' willingness to pay taxes (Kirchler, 2007) and it is difficult to view from a common perspective and viewpoint on tax compliance (Devos, 2008). Therefore, perhaps the most difficult point for authors in tax compliance research is whether taxpayers' behavior can be explained as compliance (or non-compliance) and how to evaluate and measure the level of taxpayer compliance (Alm, 2012). Therefore, with different research objectives and research directions, scientists have applied different research methods (or can be said to be very diverse) in the study of tax compliance and tax compliance behavior (Slemrod, 2016). Those methods include:

(i) quantitative research methods (based on tax authority statistical data, experimental methods, survey methods, descriptive statistics);

(ii) Qualitative method (interview);

(iii) mixed research method (survey using questionnaire combined with interview).


In which, the number of projects applied for each method is as follows:

Table 1.4: Statistics of number of works by research method



TT

Research methods

Research work (by author/author group name)

Number of studies

1

Quantitative PPNC based on statistical data

Mas'ud et al (2014) Nagel et al (2018) Mas'ud et al (2019)

3

2

Method

descriptive statistics

Fjeldastad and Semboja (2001)

Fagbemi et al. (2010)

2

3

Test method

Park and Hyun (2003); Trivedi et al. (2005); Kastlunger et al. (2009); Alan Lewis et al. (2009); Kirchler and Wahl, 2010); Wahl, Kastlunger and Kirchler, (2010); Alm et al. (2010); Casagrande et al. (2015); Kogler et al. (2015); Alm et al. (2016); Casal et al. (2016); Choo et al. (2016); Andi Nurwanah et al. (2018); Yasa and Martadinata

(2018); Robbins and Kiser (2020).

15

4

Survey method

Khasawneh et al. (2008); Hai and See (2011); Benk et al. (2010); Benk et al. (2012); Damayanti (2012); Fadjar OP Siahaan (2012); Natrah Saad (2012); Kastlunger et al. (2013); Eichfelder et al. (2014); Damayanti et al. (2015); Lidija Hauptman et al. (2015); Azmi et al. (2016); Gobena et al. (2016); Jimenez and Iyer, (2016); Olsen, et al. (2018); Siglé et al. (2018); Manchilot Tilahun (2018); Fjeldstad et al. (2020); Abba Ya'u, Natrah Saad (2019); Da Silva et al. (2019); Malik and Younus (2020); Sikayu et al. (2020); Taing and Chang, (2020); Hassan et al. (2021);

Swee Kiow Tan et al. (2021)

25

5

Method

interview

Saad, Natrah (2014); Darmayasa and Aneswari

(2015); Xin He and Huina Xiao (2019)

3

6

Method

desk research

Lilia and Nicholas (2016)

1

7

Mixed Methods (Survey + Interview)

Raihana and Pope (2014), Abdul Hamid, (2014),

Cechovsky, N. (2018), Deyganto (2018),

Nguyen Thi Thuy Duong and colleagues (2019)

5

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Overview of Research Methods Applied in Tax Compliance Behavior Research

Source: Synthesized from research overview results


Thus, from the overview results of the research methods applied by the works, it shows that:

Firstly, quantitative PPNC based on statistical data, although it is considered a standard approach to analyzing tax compliance, is only applied in 3/54 research works, because this method is only suitable for some research directions on tax compliance in which influencing factors and tax compliance behavior are measured through data and figures that tax authorities collect and provide 11 . This method is not simply checking a random sample of tax declarations to estimate the level of evasion in the population, but when implementing this method, it requires funding, time and research results cannot fully explain taxpayer compliance behavior (Slemrod, 2016). For example, Kirchler and Wahl (2010) argued that if the impact of tax rates, tax audit probability, fines, and income on taxpayers' tax compliance is assessed, a quantitative research method based on tax authority data on tax evasion can be used to ensure certain scientific validity, but this method has not yet shown many aspects of taxpayers in explaining tax compliance behavior. Hallsworth (2014) also agreed with the above view when pointing out that this method is expensive to conduct; tax officials may not detect all unreported income; auditors may not distinguish between fraud and unintentional errors; judgments are not always consistent from auditor to auditor; and audits do not address the underlying factors that sometimes manifest simply as not declaring taxes. Therefore, for the purpose of studying the factors affecting the tax compliance behavior of taxpayers, the quantitative research method based on statistical data of tax authorities has not been able to explain many aspects (psychological, social) of taxpayers on their tax compliance behavior.



11 For example, one of the studies that has used this method quite typically is the study of Mas'ud et al. (2019) with the research direction of trust and power as predictors of tax compliance. In this study, the authors used statistical data from 2016 from 158 countries. In which, the dependent variable of tax compliance is measured by using the percentage of tax revenue/GDP for all countries. This percentage is understood as a low percentage is a sign of low tax compliance (higher tax evasion, tax avoidance); similarly, a high percentage indicates high compliance (lower tax evasion, tax avoidance). For the first independent variable, trust in authorities is used through the corruption perception index of Transparency International. For the second independent variable is government power through the rule of law index in the Global Governance Indicators.


Second, Kirchler and Wahl (2010) argue that field experiments are valuable methods for providing reliable estimates in research on the determinants of tax compliance. Here, the challenge is to find comparable control and experimental groups in the population and to control for treatment and confounding variables. Meanwhile, laboratory experiments (e.g., Alm, Jackson, and McKee, 1992; Kastlunger et al., 2009,..) need to be conducted in a highly controlled environment. Therefore, the applicability of laboratory experimental research results to practical conditions or to other subjects is always a notable question (because the majority of studies use students as test subjects - see table 5 of appendix 01).

Third, the overall results of research works related to tax compliance behavior show that: the structured questionnaire survey method through asking taxpayers to self-report (choosing options from 1-strongly disagree/Very unlikely to happen 5 - Strongly agree/Very likely to happen based on taxpayers' perceptions) is applied by many (30/54) research works in studying the influence of factors on tax compliance behavior .

The survey method is implemented by asking respondents to self-report on issues related to tax compliance behavior. When applying the survey method using self-report, a major problem is that respondents may not recall their past tax behavior accurately or - even if they can - may not recognize that behavior as non-compliant (Haging, Elffers and Weigel, 1988 and 1989). Therefore, it is important to choose a scale that reflects the concept for each variable and the research context.

In addition, it has been argued that with surveys measuring tax compliance behaviour (especially in hypothetical situations) it is important to note evidence that intentions may not actually materialise in practice (Elffers, Weigel and Haging, 1987; Webb and Sheeran, 2006). However, Ajzen (1991) describes intention as the extent to which an individual is willing to attempt to perform a behaviour, or a concerted effort to mobilise action to perform the behaviour. An individual's intention about a behaviour will influence the behaviour performed, because the relationship between the intention to perform a behaviour and the behaviour actually performed is mediated by the individual's perceived behavioural control (See Figure 1.2). Intentions are then understood not only as the most immediate responses to a behavior, but also as the convergence of cognitive, motivational, and emotional processes related to a certain behavior (Casper, 2007). Therefore,


The thesis aims to survey the awareness of individual business households about tax compliance behavior, which is appropriate and ensures scientific nature.

Fourth , for the survey method, the sampling method is also applied by the authors in a variety of ways, including: systematic random sampling method (Malik and Younus, 2020), stratified sampling (Natrah Saad, 2012; Raihana, and Pope, 2014; Robbins and Kiser, 2020), random sampling (Hai and See, 2011; Saad, Natrah; 2014; Casagrande et al., 2015; Jimenez and Iyer, 2016; Fjeldstad et al., 2020), multi-stage sampling (Damayanti et al., 2015), "snowball" sampling (Taing and Chang, 2020) or convenience sampling method - this is a sampling method applied by many studies on tax compliance behavior in both developed and developing countries. developing (See table 1.5)

Table 1.5: Some studies applying convenience sampling method



TT

Author

Nation

Research topic

Research methods

Survey subjects

Sampling method

Sample size

1

Kastlunger et al. (2009)

IDEA

Audit chains, tax compliance and tax payment strategies

Experiment

Student

Convenient

120

2

Alm et al. (2010)


Taxpayer information support service and TTT behavior

Experiment

Taxpayer

Convenient

131

3

Alm et al. (2016)

United States and Italy

Taxpayer behavior: culture, compliance and security

Experiment

Student

Convenient

170 (with 92 in the US and 78 in Italy)

4

Olsen, et al. (2018)

Türkiye

Emotions and tax compliance

Survey

Self-employed taxpayer

Convenient

411

5

Cechovsky, N. (2018)

Shirt

The Importance of Tax Knowledge for Tax Compliance

Mixed (interview + survey)

Student

Convenient

Interviews (n = 22),

Survey (n = 688)

6

Nguyen Thi Thuy Duong and colleagues (2019)

Vietnam

Corporate Tax Compliance

Mixed (interview + survey)

Chief Accountant or CFO

Convenient

200

7

Sikayu et al. (2020)

Malaysia

The impact of altruistic or selfish orientation on voluntary tax compliance

Survey

Taxpayer

Convenient

244

8

Hassan et al. (2021)

Pakistan

Voluntary tax compliance behavior

Survey

Taxpayer

Convenient

435

Source: Author's synthesis from research review results


1.5. Conclusions drawn from an overview of related research works and research directions of the topic

1.5.1. Inherited content

Research on tax compliance behavior and factors affecting tax compliance behavior has been conducted by many domestic and foreign scholars. Some contents that the thesis will inherit from previous studies:

The SSF model of tax compliance is a model applied by many studies on tax compliance behavior (See Table 1.1), in which the SSF model assumes that tax compliance behavior can be classified into voluntary tax compliance behavior and compulsory tax compliance behavior. In addition, the SSF identifies two central factors affecting taxpayer compliance, which are the perception of the power of the tax authority and trust in the tax authority. Therefore, the thesis focuses on tax compliance behavior viewed in two aspects: voluntary compliance behavior or compulsory compliance behavior; in which the perception of the power of the tax authority and trust in the tax authority are also factors inherited and applied in the research model (See Figure 2.6).

The theory of planned behavior (Ajzen, 1991) indicates that an individual's intention about a behavior will influence the behavior performed. Behavioral intention is influenced by three factors: Attitude toward the behavior, subjective norms (perceptions of social pressure or social influence on the behavior), and perceived behavioral control.

vi. Harinurdin (2009) pointed out that perceived behavioral control has a negligible effect on taxpayers' compliance behavior, but it is the perceived behavioral control component that has a positive effect on intentions becoming behaviors, and then intentions are understood not only as the most immediate reactions to a behavior, but also as the convergence of cognitive processes, motivations and emotions related to a certain behavior and then intentions become behaviors that are performed (Casper, 2007). Inheriting the above viewpoint, the thesis aims to survey the awareness of individual business households about tax compliance behavior to serve as a basis for assessing and measuring tax compliance behavior of individual business households instead of measuring tax compliance behavior through the amount of tax paid/the amount of tax that should have been paid; or the rate of correctly declaring the declared income (or revenue) with the actual income (or revenue) 12 of the taxpayer.



12 This method of assessing tax compliance behavior is very costly in terms of resources and lacks feasibility when applied to assess the compliance behavior of business household owners.


In addition , the overall results show that perceived behavioral control has a negligible effect on taxpayers' compliance behavior, but the component of perceived behavioral control has a positive effect on intention to become behavior (Harinurdin, 2009). While taxpayers' perceptions of the fairness of the tax system, the power of tax authorities, tax awareness... are the convergence of cognitive processes, motivations and emotions related to tax compliance behavior, or it can be understood that perceptions of the above aspects of tax control behavior are carried out by taxpayers. Therefore, the factor of perceived behavioral control is often not directly applied to the research model of factors affecting tax compliance behavior but is replaced by factors such as taxpayers' perceptions of the fairness of the tax system, the power of tax authorities, and tax awareness (See Table 3 - Appendix 01). Therefore, the thesis uses TPB theory with two components: attitude (tax spirit), subjective norms and extends cognitive factors (perceptions) about fairness, power of tax authorities, trust in tax authorities, tax awareness, awareness of the possibility of being audited, inspected, awareness of penalties, awareness of tax complexity to taxpayers' information processing behavior (called TPB theory extended with some factors).

Economic deterrence theory and the Allingham and Sandmo (1972) model on tax compliance, institutional theory, and equity theory are also fundamental theoretical bases in proposing influencing factors and explaining the influence of each factor on tax compliance behavior of KDCT households.

The overall results of the factors affecting tax compliance behavior show that there are many factors that affect the tax compliance behavior of taxpayers. Based on the statistical method of frequency of occurrence and factors that previous research results have not completely agreed on the impact on tax compliance behavior, the thesis uses these results to propose a research model.

The overall research results show that tax compliance and factors affecting tax compliance can be defined from different perspectives. Therefore, the thesis aims to inherit the definitions used by many studies on tax compliance and the measurement scales that correctly define the variables, giving priority to choosing the scales used by many research works.

In addition, the overall results of research methods applied to taxpayers' tax compliance behavior indicate that the survey method using questionnaires for individuals to self-report on tax compliance behavior and factors affecting tax compliance behavior is the method applied by many studies. Therefore, considering the scientific


Based on the study and suitability of the method with the research objectives and objects, this method is inherited by the author in carrying out the thesis.

1.5.2. Research gap

Firstly , with the research direction on the influence of factors on tax compliance behavior, the research subjects are very diverse from enterprises (large, medium and small, micro; start-up enterprises, private enterprises, tax agents), individuals (taxpayers, tax experts, employees). However, the research direction on tax compliance behavior with individual business households working and doing business in craft villages has not been conducted by any research and this is a gap in the research on tax compliance behavior. Besides, this is also one of the quite popular business groups and is a unique characteristic of Vietnam's socio-economy.

Second, the factors (tax spirit, subjective norms, perception of the fairness of the tax system, trust in the tax authority, the power of the tax authority, tax awareness, tax complexity, tax information, penalties, the possibility of being audited, tax inspected, age, gender, education level, income, number of years of business operation) are the factors used by many previous studies. However, the results of previous studies have not yet reached a complete consensus on the influence (positive or negative; direct or indirect; or there is no basis to confirm the relationship) of these factors on the tax compliance behavior of taxpayers. This is the gap in the research and it is necessary to continue to study the influence of these factors on tax compliance behavior of individual business households (working and doing business in craft villages) to narrow the above research gap.

Third, the impact of perceptions of the fairness of the tax system and trust in the tax authority on tax compliance behavior is not completely consistent. As the overall research results have shown: (i) Perceptions of the fairness of the tax system help increase taxpayers' trust in the tax authority and thereby increase tax compliance behavior (Alm et al., 2012; Kogler et al., 2013; Lisi, 2014); (ii) trust in the tax authority has a significant impact on both perceptions of the fairness of the tax system and taxpayers' tax compliance decisions (Jimenez and Iyer, 2016);

(iii) trust in tax authorities moderates the relationship between perceived fairness and tax compliance (Fadjar OP Siahaan, 2012; Abba Ya'u and Natrah Saad, 2019). This is the research gap on the relationship between perceived fairness, trust in tax authorities and taxpayers' tax compliance behavior.

Fourth, deterrent measures through tax audits, inspections and penalties (penalties) are still the basic measures that many governments (tax authorities) apply to

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