Further Improving Our Understanding of the Tax Awareness, Tax Literacy and Tax Morale of Young Adults

Phyllis Alexander, Merima Balavac-Orlic, Andy Lymer, Suranjita Mukherjee


Developed countries have, for some years, been introducing policies that focus more on the individual’s responsibility to engage with taxpaying obligations. At the same time, they have provided less state support and assistance except where taxpayers are motivated to self-serve online. This paper argues that, given this change of approach to compliance, a greater focus on tax education is needed, particularly amongst younger people as they prepare to engage with the tax system beyond consumption taxation payment, and in order to build a platform for compliance improvement efforts in the future that is better suited to this greater focus on the individual’s responsibility for compliance. As such, it is also necessary to ascertain the most effective way in which to educate young people about the tax system. This paper seeks to contribute to this. It presents quantitative research into socio-demographic influences and the impact that tax tuition may have on young adults’ tax morale. The results of a two-staged survey show that gender, tax tuition, and employment experience significantly influence tax morale. The study contributes to the literature on tax morale and tax literacy by showing, through regression analysis, that the effect of tax tuition on tax morale is negatively influenced by employment experience. 

Keywords: Tax Morale, Tax Literacy, Tax Education, Work Experience.

Full Text:



Aberbach, J. D., & Christensen, T. (2007). The challenges of modernizing tax administration: Putting customers first in coercive public organizations. Public Policy and Administration, 22(2), 155–182. https://doi.org/10.1177/0952076707071501

Akerlof, G. A. (1980). A theory of social custom, of which unemployment may be one consequence. The Quarterly Journal of Economics, 94(4), 749–775. https://doi.org/10.2307/1885667

Alexander, P., & Balavac-Orlic, M. (2022). Tax morale: Framing and fairness. Economic Systems, 46(1), 100936. https://doi.org/10.1016/j.ecosys.2021.100936

Alexander, P., Balavac, M., Mukherjee, S., Massey, D. & Lymer, A. (2019). Improving tax literacy and tax morale in young people: End of project report for the Chartered Institute of Taxation. http://eprints.bournemouth.ac.uk/35081/

Alford, J. (2009). Engaging public sector clients: From service delivery to co-production. Palgrave Macmillan.

Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3-4), 323–338. https://doi.org/10.1016/0047-2727(72)90010-2

Alm, J. (1991). The perspectives on experimental analysis of taxpayer reporting. The American Review, 66(3), 577–593.

Alm, J., McClelland, G. H., & Schulze, W. D. (1992). Why do people pay taxes? Journal of Public Economics, 48(1), 21–48. https://doi.org/10.1016/0047-2727(92)90040-M

Alm, J., & Torgler, B. (2006). Cultural differences and tax morale in the United States and in Europe. Journal of Economic Psychology, 27(2), 224–246. https://doi.org/10.1016/j.joep.2005.09.002

Barone, G., & Mocetti, S. (2011). Tax morale and public spending inefficiency. International Tax and Public Finance, 18, 724–749. https://doi.org/10.1007/s10797-011-9174-z

Becker, G. S. (1968). Crime and punishment: An economic approach. In N. G. Fielding, A. Clarke, & R. Witt (Eds.), The economic dimensions of crime (pp. 13–68). Palgrave Macmillan.

Brink, W. D., & Porcano, T. M. (2016). The impact of culture and economic structure on tax morale and tax evasion: A country-level analysis using SEM. Advances in Taxation (Volume 23, pp. 87–123). Emerald Group Publishing.

Chen, H. & Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7(2), 107–128. https://doi.org/10.1016/S1057-0810(99)80006-7

Chung, P. (1976). On complaints about “high” taxes: An analytical note. Public Finance, 31(1), 125–131.

Cullis, J., Jones, P., & Lewis, A. (2006). Tax framing, instrumentality and individual differences: Are there two different cultures? Journal of Economic Psychology, 27(2), 304–320. https://doi.org/10.1016/j.joep.2005.07.003

Currie, G., Tuck, P., & Morrell, K. (2015). How hybrid managers act as “canny customers” to accelerate policy reform: A case study of regulator-regulatee relationships in the UK’s tax agency. Accounting, Auding & Accountability Journal, 28(8), 1291–1309. https://doi.org/10.1108/AAAJ-12-2014-1889

D’Attoma, J. W., Volintiru, C., & Malézieux, A. (2020). Gender, social value orientation, and tax compliance. CESifo Economic Studies, 66(3), 265–284. https://doi.org/10.1093/cesifo/ifz016

Daude, C., Gutiérrez, H., & Melguizo, Á. (2013). What drives tax morale? A focus on emerging economies. Hacienda Pública Espaňola/Review of Public Economics, 207(4), 9–40.

Deloitte. (2019). The tax education gap – is it time to talk tax? https://www2.deloitte.com/uk/en/pages/tax/articles/tax-education-gap.html

De Stefano, V. (2015). The rise of the “just-in-time workforce”: On-demand work, crowdwork, and labor protection in the “gig economy”. Comparative Labor Law & Policy Journal, 37(3), 471–504.

Doerrenberg, P., & Peichl, A. (2013). Progressive taxation and tax morale. Public Choice, 155(3–4), 293–316.

Eriksen, K., & Fallan, L. (1996). Tax knowledge and attitudes towards taxation: A report on a quasi-experiment. Journal of Economic Psychology, 17(3), 387–402. https://doi.org/10.1016/0167-4870(96)00015-3

Fehr, E., & Fischbacher, U. (2004). Social norms and human cooperation. Trends in Cognitive Sciences, 8(4), 185–190. https://doi.org/10.1016/j.tics.2004.02.007

Finance Act 2021, c.1. https://www.legislation.gov.uk/ukpga/2021/26/enacted#:~:text=2021%20CHAPTER%2026,provision%20in%20connection%20with%20finance

Frey, B. S., & Feld, L. P. (2002). Deterrence and morale in taxation: An empirical analysis (CESifo Working Paper Series No 760). https://doi.org/10.2139/ssrn.341380

Frey, B. S. & Torgler, B. (2007). Tax morale and conditional cooperation. Journal of Comparative Economics, 35(1), 136–159. https://doi.org/10.1016/j.jce.2006.10.006

Gangl, K., Hofmann, E., & Kirchler, E. (2015). Tax authorities’ interaction with taxpayers: A conception of compliance in social dilemmas by power and trust. New Ideas in Psychology, 37, 13–23. https://doi.org/10.1016/j.newideapsych.2014.12.001

Gemmell, N., Morrissey, O., & Pinar, A. (2003). Tax perceptions and the demand for public expenditure: Evidence from UK micro-data. European Journal of Political Economy, 19(4), 793–816. https://doi.org/10.1016/S0176-2680(03)00037-5

Goksu, G. G., & Sahpaz, K. I. (2015). Comparison of tax morale of Turkish and Spanish higher education students: The samples of Sakarya University and the University of Zaragoza. Procedia - Social and Behavioral Sciences, 186, 222–230. https://doi.org/10.1016/j.sbspro.2015.04.027

Gordon, J. P. P. (1989). Individual morality and reputation costs as deterrents to tax evasion. European Economic Review, 33(4), 355–363. https://doi.org/10.1016/0014-2921(89)90026-3

Hansen, P. (2003). Taxing illusions: Taxation, democracy and embedded political theory. Fernwood Publishing.

Hasseldine, J., Hite, P.., James, S., & Toumi, M. (2005). Carrots, sticks, sole proprietors, and tax accountants. The IRS Bulletin: Recent Research on Tax Administration and Compliance: Proceedings of the 2005 IRS Conference, 191–210.

HM Revenue & Customs. (2022, June). Table 2.1 - Number of individual taxpayers. UK Government, HMRC. https://www.gov.uk/government/statistics/number-of-individual-income-taxpayers-by-marginal-rate-gender-and-age

Hoffman, N. (2015). Let’s get real: Deeper learning and the power of the workplace (Deeper Learning Research Series). Jobs for the Future.

Horodnic, I. A. (2018). Tax morale and institutional theory: A systematic review. International Journal of Sociology and Social Policy, 38(9/10), 868–886. https://doi.org/10.1108/IJSSP-03-2018-0039

James, S., & Alley, C. (2009). Tax compliance, self-assessment and tax administration. Journal of Finance and Management in Public Services, 2(2), 27–42.

Kahan, D. M., & Braman, D. (2006). Culture cognition and public policy. Yale Law & Policy Review, 24(2), 149–172.

Kasipillai, J., Aripin, N., & Amran, N.A. (2003). The influence of education on tax avoidance and tax evasion. e-Journal of Tax Research, 1(2), 134–146.

Kolstad, I. (2007). The evolution of social norms: With managerial implications. The Journal of Socio-Economics, 36(1), 58–72. https://doi.org/10.1016/j.socec.2005.11.028

Konrad, K. A., & Qari, S. (2012). The last refuge of a scoundrel? Patriotism and tax compliance. Economica, 79(315), 516–533. https://doi.org/10.1111/j.1468-0335.2011.00900.x

Kornhauser, M. E. (2007). A tax morale approach to compliance: Recommendations for the IRS. Florida Tax Review, 8(6), 599–640.

Kurniawan, D. (2020). The influence of tax education during higher education on tax knowledge and its effect on personal tax compliance. Journal of Indonesian Economy and Business, 35(1), 57–72. https://doi.org/10.22146/jieb.54292

Laffont, J. J. (1975). Macroeconomic constraints, economic efficiency and ethics: A Kantian economics. Economica, 42(168), 430–437. https://doi.org/10.2307/2553800

Lewis, A. (1982). The psychology of taxation. Martin Robertson & Company Ltd.

Lewis, A., Carrera, S., Cullis, J., & Jones, P. (2009). Individual, cognitive and cultural differences in tax compliance: UK and Italy compared. Journal of Economic Psychology, 30(3), 431–445. https://doi.org/10.1016/j.joep.2008.11.002

Loo, E. C., Hansford, A., & McKerchar, M. (2005). An international comparative analysis of self assessment: What lessons are there for tax administrators? Australian Tax Forum, 20(4), 669–710.

Luttmer, E. F. P., & Singhal, M. (2014). Tax morale. Journal of Economic Perspectives, 28(4), 149–168. https://doi.org/10.1257/jep.28.4.149

Lymer, A. (2015, 4 December). Public attitudes to tax – who cares? Tax Adviser Magazine. https://www.taxadvisermagazine.com/article/public-attitudes-tax-who-cares

Mazar, N., & Ariely, D. (2006). Dishonesty in everyday life and its policy implications. Journal of Public Policy & Marketing, 25(1), 117–126.

McGee, R. W. (2006). The ethics of tax evasion: A survey of international business academics. https://doi.org/10.2139/ssrn.803964

McGee, R. W., & Bernal, A. (2006, February 10-11). The ethics of tax evasion: A survey of business students in Poland [Conference presentation]. Sixth Annual International Business Research Conference, Jacksonville, Florida, FL, United States. https://doi.org/10.2139/ssrn.875434

McGee, R. W., Nickerson, I., & Fees, W. (2005, October 12-15). When is tax evasion ethically justifiable? A survey of German business students. Allied Academies International Conference, Academy of Legal, Ethical and Regulatory Issues: Proceedings, 9(2), 33–34.

McGee, R. W., & Tusan, R. (2008). The ethics of tax evasion: A survey of Slovak opinion. In R. W. McGee (Ed.), Taxation and public finance in transition and developing economies (pp. 575–601). Springer.

McGee, R. W. & Tyler, M. (2006). Tax evasion and ethics: A demographic study of 33 countries (Andreas School of Business Working Paper). https://doi.org/10.2139/ssrn.940505

McKerchar, M., Bloomquist, K., & Pope, J. (2013). Indicators of tax morale: An exploratory study. eJournal of Tax Research, 11(1), 5–22.

Myles, G. D., & Naylor, R. A. (1996). A model of tax evasion with group conformity and social customs. European Journal of Political Economy, 12(1), 49–66. https://doi.org/10.1016/0176-2680(95)00037-2

Naylor, R. (1989). Strikes, free riders, and social customs. The Quarterly Journal of Economics, 104(4), 771–805. https://doi.org/10.2307/2937867

Onu, D., Oats, L., Kirchler, E., & Hartmann, A. J. (2019). Gaming the system: An investigation of small business owners’ attitudes to tax avoidance, tax planning, and tax evasion. Games, 10(4), 46. https://doi.org/10.3390/g10040046

Organisation for Economic Co-operation and Development & The International and Ibero-American Foundation for Administration and Public Policies. (2015). Building tax culture, compliance and citizenship: A global source book on taxpayer education. OECD Publishing.

Organisation for Economic Co-operation and Development. (2019). Tax morale: What drives people and businesses to pay tax? OECD Publishing.

Rodriguez-Justicia, D., & Theilen, B. (2018). Education and tax morale. Journal of Economic Psychology, 64, 18–48. https://doi.org/10.1016/j.joep.2017.10.001

Sugden, R. (1984). Reciprocity: The supply of public goods through voluntary contributions. Economic Journal, 94(376), 772–787. https://doi.org/10.2307/2232294

Torgler, B. (2002). Speaking to theorists and searching for facts: Tax morale and tax compliance in experiments. Journal of Economic Surveys, 16(5), 657–683. https://doi.org/10.1111/1467-6419.00185

Torgler, B. (2003). Tax morale and tax compliance: A cross culture comparison. Proceedings: Annual conference on taxation and minutes of the annual meeting of the National Tax Association, 2003, 96, 63–74.

Torgler, B. (2006). The importance of faith: Tax morale and religiosity. Journal of Economic Behavior & Organization, 61(6), 81–109. https://doi.org/10.1016/j.jebo.2004.10.007

Torgler, B. (2007). Tax compliance and tax morale: A theoretical and empirical analysis. Edward Elgar Publishing Ltd.

Torgler, B. (2011). Tax morale and compliance: Review of evidence and case studies for Europe (World Bank Policy Research Working Paper 5922). https://doi.org/10.1596/1813-9450-5922

Torgler, B., & Murphy, K. (2004). Tax morale in Australia: What shapes it and has it changed over time? Journal of Australian Taxation, 7(2), 298–335.

Torgler, B., Schaffner, M., & MacIntyre, A. (2010). Tax compliance, tax morale, and governance quality. In J. Alm, J. Martinez-Vazquez, & B.

Torgler (Eds.), Developing alternative frameworks for explaining tax compliance (pp. 56–73). Routledge.

Torgler, B., & Schneider, F. (2007). What shapes attitudes toward paying taxes? Evidence from multicultural European countries. Social Science Quarterly, 88(2), 443–470. https://doi.org/10.1111/j.1540-6237.2007.00466.x

Wong, R. M. K., & Lo, A. W. Y. (2015). Can education improve tax compliance? Evidence from different forms of tax education (Hong Kong Institute of Business Studies Working Paper Series 074-1415). https://commons.ln.edu.hk/hkibswp/93/


  • There are currently no refbacks.

Copyright ©  Journal of Tax Administration. All rights reserved. | Hosted by Docuracy Ltd | Powered by Open Journal Systems