The role of cognitive moral development in tax compliance decision making: An analysis of the synergistic and antagonistic tax climates

Abstract

Purpose

This paper aims to investigate the role of cognitive moral development (CMD) in tax compliance decision. In particular, the study compares tax compliance degree in two different tax systems: synergistic and antagonistic tax climates.

Design/methodology/approach

Build on the CMD theory, this study uses a paper and pencil laboratory experiment that involved 157 participants to test the hypotheses.

Findings

CMD has significant contribution to the tax compliance decision, especially for taxpayers at both the pre-conventional and conventional level. Taxpayers who have achieved post-conventional level, however, do not shift their compliance degree even when the tax climate changed. The present results support the CMD theory.

Originality/value

To the best of the authors’ knowledge, the present study is the first to investigate the role of CMDin tax compliance decision by comparing two different tax systems: synergistic and antagonistic tax climates. This study has theoretical and practical contributions. From theoretical perspective, the findings provide evidence that CMD influence tax compliance decision-making processes. In the practical terms, this research may provide a deep insight on the important of government and tax authorities to improve the taxpayers’ moral cognitive, e.g. through any activities which aims to boost them to the level of post-conventional.

Citation

Iqbal, S. and Sholihin, M. (2019), "The role of cognitive moral development in tax compliance decision making: An analysis of the synergistic and antagonistic tax climates", International Journal of Ethics and Systems, Vol. 35 No. 2, pp. 227-241. https://doi.org/10.1108/IJOES-10-2018-0152