Taxpayers’ Perception towards Tax Non-Compliance in Kalutara District

Abstract

This study is aimed to identify the most influential factors on taxpayers‟ non-compliance and, to establish relationship between taxpayers‟ perception in-term of tax rate, tax education, tax morale, public governance quality and tax non compliance behavior. Eight determinants namely, gender, age, education level, income level, tax rate, tax education, tax morale and public governance quality are included in this study. Convenience sampling procedure was used in this research based on the availability of respondents, studying the perception on tax non-compliance among taxpayers in Kalutara District. Data were collected from hundred individual income taxpayers and analyzed it using Descriptive statistics, Correlation analysis, Regression analysis and ANOVA and Independent sample T-test. The results show that there is positive significant relationship between taxpayers‟ perception and tax non-compliance and there are no differences in age and gender towards tax non-compliance. There are significant impact of tax rate and public governance quality towards tax non-compliance among individual income taxpayers; whilst tax education and tax morale affect tax non-compliance but the results are insignificant. Overall, the findings in this study are supported by other studies in literatures. The study provides insights both policy makers and tax administrators to gain better understanding of the key variables that are significantly associated with tax non-compliance and enable them to implement suitable strategies to minimize potential damaging factors and allow them to improve government revenue.