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Tax morale in Latin America

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Abstract

In the tax compliance literature, there is a lack of empirical evidence on the degree of tax morale in developing countries. As a novelty, this paper focuses thus on Latin America, analysing tax morale as a dependent variable and searching for factors that systematically affect tax morale, working with the two data sets Latinobarómetro and World Values Survey. Our findings indicate that there is a significant correlation between tax morale and the size of shadow economy. Furthermore, people who said they knew/have heard about practised tax avoidance have a significantly lower tax morale than others. Looking at individuals’ perception of reasons for tax evasion we found that the tax burden, lacking honesty, and corruption are seen as the main factors. We observed a significantly lower tax morale in South America/ Mexico than in the Central American/Caribbean area. Furthermore, trust in the president and the officials, the belief that other individuals obey the law and a pro democratic attitude have a significant positive effect on tax morale.

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Authors and Affiliations

  1. Andrew Young School of Policy Studies, Georgia State University, Atlanta, U.S.A.

    Benno Torgler

  2. Wirtschaftswissenschaftliches Zentrum (WWZ), Basel, and CREMA Center for Research in Economics, Management and the Arts, University of Basel, Switzerland

    Benno Torgler

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  1. Benno Torgler
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Correspondence to Benno Torgler.

Additional information

For advice and suggestions thanks are due to Doris Aebi, René L. Frey and an anonymous referee. Financial support from the Swiss National Science Foundation is gratefully acknowledged.

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Torgler, B. Tax morale in Latin America. Public Choice 122, 133–157 (2005). https://doi.org/10.1007/s11127-005-5790-4

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  • DOI: https://doi.org/10.1007/s11127-005-5790-4

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