Analysis of Tax Compliance Through the Tax Literacy Model(TaxLM): The Case of Türkiye

Abstract

Tax compliance refers to an individual’s adherence to tax rules, which varies depending on internal and external factors. Tax literacy is a comprehensive concept encompassing tax knowledge, a positive attitude toward taxes, and the ability to apply tax practices effectively. This study examines the relationship between tax compliance and tax literacy, which is both an internal and sociological factor, through the lens of trust and fairness in tax administration, as well as tax resistance variables, using a structural equation model.

The Tax Literacy Model (TaxLM) measures the relationship between tax compliance and all sub-dimensions of tax literacy, divided into cognitive, affective, and psychomotor sub-categories according to the learning stages. The study sample consisted of 778 taxpayers from 26 cities in the NUTS-2 subregion of Türkiye. As a result of the research, it was determined that the affective dimension of tax literacy significantly impacts tax compliance through the intermediary variables of trust, fairness, and tax resistance. Additionally, the psychomotor dimension of tax literacy had an indirect effect on tax compliance via tax resistance, whereas the cognitive dimension had a minimal impact on tax compliance.

Keywords

• Tax Literacy
• Tax Compliance
• Structural Equation Model
• Educational Taxonomy

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