The Influence of Tax Culture in Improving the Tax Compliance

  • Stevan Gaber
  • Ilija Gruevski


After decade of sluggish growth in many countries caused by the economic crises, governments inclined towards expansive fiscal policy expressed through decrease in tax rates and increase in public spending. The serious expansion followed by broad and diversified fiscal measures in public spending come to an end. Most developing countries build a higher ratio of debt to GDP that influenced on fiscal policy. The focus now is on the revenue side or exactly on tax revenues. These revenues become necessary for governments, because they impact the poverty, invest in projects that impact on the development, provide public services and the most important they build the infrastructure for long term growth. Furthermore, most of the developing countries face serious problems described through small tax base, large informal economy, weak government institutions, untruthful and corruptive administration, low levels of GDP per capita, low level of domestic savings, low levels of domestic investments, and as usually follows high rates of tax evasions by elites. All these factors were the reasons why many countries in the past inclined towards external sources for funding the government expenditures. But now we have announcements by many countries towards changes in the tax regimes with intention to impact the domestic sources of funding. That kind of action from the left governments triggered serious displeasure especially in small developing countries, which until now were used to use flat tax rates. These shift in tax policy opened one intriguing question about tax compliance, which is inevitably correlated with the concept of tax culture. This concept is new, and its main goal is to comprehend people’s behavior in fulfillment of their obligations towards the government.
Keywords  Tax culture, tax compliance, tax discipline, tax morale, tax revenues.


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Economics (Microeconomics, Macroeconomics, International Economics)