Study examines tax compliance behavior in small business owners

tax
Credit: CC0 Public Domain

A new Applied Psychology study examines the ethical behaviours of small business owners in terms of tax compliance versus avoidance, and how internalised values and external punishment may come into play.

When researchers surveyed 330 owners or part-owners of micro-business in the UK, they found that internalised and extrinsic motivation have distinct predictors. Internalised motivation is related to strong personal moral norms to comply and a sense that the fiscal system is fair. Extrinsic motivation is related to perceptions that penalties are severe, that checks are likely, and is associated with a perceived lack of tax knowledge.

The investigators also found that, when considered together, internalised motivation but not extrinsic motivation predicts self-reported tax compliance. In addition, the presence of extrinsic motivation—although only at very high levels—may crowd out the positive effect of internalised .


Explore further

Set new milestones for exercise motivation

More information: Diana Onu et al, The Dynamics of Internalised and Extrinsic Motivation in the Ethical Decision-Making of Small Business Owners, Applied Psychology (2018). DOI: 10.1111/apps.12151
Provided by Wiley
Citation: Study examines tax compliance behavior in small business owners (2018, May 30) retrieved 14 December 2019 from https://phys.org/news/2018-05-tax-compliance-behavior-small-business.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
1 shares

Feedback to editors

User comments