Does culture influence whether a society justifies tax cheating?

Abstract

Purpose This paper aims to investigate whether culture has an impact on justifications for tax cheating, and if there is, indeed, a rationale for justifying this behavior. Design/methodology/approach World surveys (V201) were used to measure justifications for tax cheating in 39 countries. Hofstede’s culture dimensions were used as a measurement scale for the relevant cultural aspects that could have an impact on tax cheating. Findings The results show that individualism and power distance increase the justification, while masculinity and uncertainty avoidance decrease the justification for tax cheating. Accordingly, when budgeting for tax revenues, governments need to consider the cultural dimension in their risk assessments for tax evasion. Originality/value The findings of this research provide some implications for legislators and policymakers. For example, they need to give more consideration to their respective society’s cultural dimensions and to the structure of their communities when they are imposing taxes. Legislators need to put more effort toward convincing people why it is necessary to impose and/or increase certain taxes, how society benefits directly and indirectly and why action needs to be taken when these taxes are not paid.