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Life Satisfaction and Tax Morale in Azerbaijan: Mediating Role of Institutional Trust and Financial Satisfaction

Author

Listed:
  • Orkhan Nadirov

    (School of Public and International Affairs, ADA University, Baku AZ1008, Azerbaijan)

  • Khatai Aliyev

    (UNEC Empirical Research Center, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat 6, Baku AZ1001, Azerbaijan
    Department of World Economy, Baku Engineering University, Hasan Aliyev 120, Khirdalan AZ0101, Azerbaijan)

  • Bruce Dehning

    (Argyros School of Business and Economics, Chapman University, One University Drive, Orange, CA 92866, USA)

  • Ilaha Sharifzada

    (Ernst&Young Holdings (CIS) B.V., Baku AZ1010, Azerbaijan)

  • Rafiga Aliyeva

    (Department of Finance and Economic Theory, Azerbaijan State Agriculture University (ASAU), Ataturk Avenue 450, Ganja AZ2000, Azerbaijan)

Abstract

This paper examines the relationship between life satisfaction (measured as the self-reported satisfaction of each individual with their past life and goal achievements) and tax morale (measured as the likelihood of an individual’s intrinsic motivation to pay taxes). Using a large-scale survey dataset from Azerbaijan, it is documented that life satisfaction is positively associated with tax morale. Life satisfaction plays a significant role in increasing tax compliance practices. It is also important to note that there is a positive mediating effect of life satisfaction on tax morale through financial satisfaction and institutional trust. In line with our hypotheses, the results of a series of analyses remain robust to different models. These results imply that a higher level of life satisfaction may increase the proportion of individuals who report the highest tax morale in Azerbaijan. Our findings have policy implications for Azerbaijan and other governments aiming to alleviate high levels of tax evasion.

Suggested Citation

  • Orkhan Nadirov & Khatai Aliyev & Bruce Dehning & Ilaha Sharifzada & Rafiga Aliyeva, 2021. "Life Satisfaction and Tax Morale in Azerbaijan: Mediating Role of Institutional Trust and Financial Satisfaction," Sustainability, MDPI, vol. 13(21), pages 1-10, November.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:12228-:d:672943
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    References listed on IDEAS

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    Cited by:

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