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Mediating role of trust in the relationship between public governance quality and tax compliance

Author

Listed:
  • Yusuf Mohammed Alkali

    (Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, 06010, Sintok, Kedah, Malaysia)

  • Abdulsalam Masud

    (Department of Accounting, Waziri Umaru Federal Polytechnic, Birnin-Kebbi, Nigeria)

  • Almustapha A. Aliyu

    (Department of Accounting, Usmanu Danfodio University, Sokoto, Nigeria)

Abstract

This paper examined the mediating role of trust in government on the influence of public governance quality indicators (accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption) on tax compliance in Africa. Cross-country data obtained from 38 African countries for 2015 was used and analyzed using Ordinary Least Squares (OLS) regression analysis. The study found that accountability, political stability, control of corruption, and trust have a significant influence on tax compliance among the sampled African countries, but government effectiveness, regulatory quality, and the rule of law and have insignificant influence on tax compliance. The result of the mediating effects revealed that trust mediates the influence of accountability and political stability on tax compliance in Africa. However, it failed to mediate the influence of government effectiveness, regulatory quality, rule of law, and control of corruption on tax compliance among sample African countries. The study offers theoretical insights on the role of trust as a mediator on social exchange relationships from the context of public governance quality on tax compliance. It also implies to the policymakers that building trust is an important mechanism through which the impact of public governance on tax compliance would be more pronounced. The study further calls for replication of its findings in other continents such as the Americas, Asia, and Europe.

Suggested Citation

  • Yusuf Mohammed Alkali & Abdulsalam Masud & Almustapha A. Aliyu, 2021. "Mediating role of trust in the relationship between public governance quality and tax compliance," Bussecon Review of Social Sciences (2687-2285), Bussecon International Academy, vol. 3(4), pages 11-22, October.
    • Handle: RePEc:adi:bsrsss:v:3:y:2021:i:4:p:11-22
    DOI: 10.36096/brss.v3i4.276
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    References listed on IDEAS

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    1. Alm, James & Jackson, Betty & McKee, Michael J., 1992. "Estimating the Determinants of Taxpayer Compliance with Experimental Data," National Tax Journal, National Tax Association, vol. 45(1), pages 107-14, March.
    2. Alex Cobham (QEH), "undated". "Tax Evasion, Tax Avoidance and Development Finance," QEH Working Papers qehwps129, Queen Elizabeth House, University of Oxford.
    3. Alm, James & Jackson, Betty & McKee, Michael J., 1992. "Estimating the Determinants of Taxpayer Compliance With Experimental Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 45(1), pages 107-114, March.
    Full references (including those not matched with items on IDEAS)

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