Open AccessThe Nexus Between Attitude, Social Norms, Intention to Comply, Financial Performance, Mental Accounting and Tax Compliance Behavior
Author(s) -
Hikmah Hikmah,
Priyo Hari Adi,
Supramono Supramono,
Theresia Woro Damayanti
Publication year - 2021
Publication title -
asian economic and financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.215
H-Index - 10
eISSN - 2305-2147
pISSN - 2222-6737
DOI - 10.18488/journal.aefr.2021.1112.938.949
Subject(s) - compliance (psychology) , social norms approach , theory of planned behavior , nexus (standard) , accounting , psychology , structural equation modeling , sample (material) , affect (linguistics) , business , social psychology , control (management) , economics , statistics , chemistry , management , mathematics , communication , chromatography , neuroscience , computer science , perception , embedded system
This study empirically investigates the effects of attitudes toward tax compliance, descriptive norms, injunctive norms, subjective norms, personal norms, tax compliance intention, financial performance, and mental accounting on tax compliance. The determinant are largely developed based on the Theory of Planned Behavior (TPB) and social norms. Data collection is carried out through field surveys to obtain a final sample of 209 respondents who are SME owners in 11 regencies/cities in Central Java Province, Indonesia. The data were analyzed using structural equation modeling (SEM). The results show that attitudes toward tax compliance, injunctive norms, subjective norms, personal norms, and financial performance positively affect SME owners’ tax compliance intentions. Furthermore, financial performance and tax compliance intentions have a positive effect on tax compliance behavior. However, we do not find empirical evidence that mental accounting has a role in strengthening the effect of tax compliance intentions on tax compliance behavior. This study contributes to the tax compliance literature through a more comprehensive measure of subjective norms and the use of financial performance as an alternative measure of perceived behavioral control.