Rethinking Tax Morale
The past decade has witnessed a surge in international interest in the importance of ‘tax morale’ as a key component of strategies for strengthening tax compliance in developing countries. This focus has been long overdue, and there is now broad research evidence that strengthening tax morale can have important benefits in encouraging ‘quasi-voluntary’ tax compliance. However, despite these research advances, this project aims to highlight several important limitations, encompassing both broad conceptual issues and technical challenges of measurement. First, there remains ambiguity about what exactly is meant by tax morale – and, in particular, whether we should understand tax morale as capturing an unconditional willingness to pay taxes, or a more conditional belief in paying taxes where tax systems are fair, equitable and reciprocal. Second, the concept continues to be measured in diverse ways, and, despite superficial similarity, there is evidence that subtly different measurement strategies can yield substantially different conclusions. Third, existing accounts of tax morale have focused on the importance of tax morale to encouraging quasi-voluntary tax compliance, but have largely overlooked the broader political role of tax morale in shaping the political context for reform. Yet the latter function may be more critical in shaping the performance of tax systems in developing countries over the long term, given that a lack of political support has often been the primary barrier to far-reaching reform.