IDEAS home Printed from https://ideas.repec.org/a/jda/journl/vol.52year2018issue3pp211-230.html
   My bibliography  Save this article

CT-Model: An Explanation of Corporate Tax Payers' Attitude

Author

Listed:
  • Bhavish Jugurnath
  • Mootooganagen Ramen

    (University of Mauritius, Mauritius)

Abstract

Whether it be in developed or in developing countries, complying with corporate tax is necessary. However, little is known about the behavior and attitudes of corporate tax payers towards tax compliance in Mauritius. Therefore, this paper adapts the theory of planned behavior concept to develop a new model, CT-model, explaining corporate tax payers' attitudes with the inclusion of organizational characteristics, perceived risks, level of understanding and government accountability. A total of 58 companies responded to the survey. Quantitative research was adopted in the study. The methodology used in the study consists of a random sampling. Data are collected from secondary sources such as articles published by the well-known periodicals, books, and dissertations in order to base the construction of the theoretical framework. The population that was considered for this study was a variety of companies involving in different business activities which included those registered as management companies, construction companies, listed companies, banking and finance companies, textile and manufacturing companies, those involve in plantation and services, as well as SMEs, all over Mauritius. Our main findings of this paper confirm that the relation between organizational characteristics, perceived risks, level of understanding and government accountability with attitudes of corporate tax payers is positively correlated, while perception of the burden of tax has no significant relationship with corporate taxpayers' attitudes. The results also show there is a strong, positive correlation between level of understanding and attitudes/compliance, with high levels of corporate tax understanding with higher levels of tax compliance. This implies that if government encourages tax payment and use the money judiciously (Ayee, 2007), then the higher will be the corporate tax compliance. In addition, the higher the perceived risk which is associated if corporate tax is not paid, such as penalties, sanction, reputational risk, then the more companies will abide to corporate tax payment. These results indicate that, the more government shows higher responsibility towards tax, the higher the companies will pay tax, or the simple the tax procedure the more corporations will abide to tax. Results are consistent with Isa (2012) and Sapiei & Kasipillai (2013) who identified that an important corporate taxpayers' compliance variable that influences compliance behavior is tax complexity / understanding. Results also indicate that firm's characteristics such as business size and tax liability influenced compliance while business age and business activity have no impact on compliance.

Suggested Citation

  • Bhavish Jugurnath & Mootooganagen Ramen, 2018. "CT-Model: An Explanation of Corporate Tax Payers' Attitude," Journal of Developing Areas, Tennessee State University, College of Business, vol. 52(3), pages 211-230, July-Sept.
  • Handle: RePEc:jda:journl:vol.52:year:2018:issue3:pp:211-230
    as

    Download full text from publisher

    File URL: https://muse.jhu.edu/article/677944
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Corporate Tax; Perception; Level of Understanding; Government Accountability; Perceived Risks; Attitudes and Compliance;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jda:journl:vol.52:year:2018:issue3:pp:211-230. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abu N.M. Wahid (email available below). General contact details of provider: https://edirc.repec.org/data/cbtnsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.