This paper is part of the International Journal of Applied Research in Business and Management (ISSN: 2700-8983), Volume 6, Issue 1, published in 2025.
Authors
Heinrich Dixon, Sharon Smulders, Elza Odendaal
Abstract
Compliance with tax laws by taxpayers is fundamental to the collection of tax revenue. Taxpayers can either comply voluntarily or they can be forced by a revenue authority to comply. Revenue authorities can thus embrace a customer service-oriented approach (based on trust) or an enforcement approach (using power) to ensure taxpayer compliance. Using a combination of the Slippery Slope Framework (SSF) and a Structural Equation Modelling (SEM) analysis, the effect of power by and/or trust in the South African Revenue Service (SARS) on small, medium and micro enterprises’ (SMMEs’) tax compliance costs is investigated. It was established that while the use of power has no statistically significant impact on tax compliance costs, trust significantly reduces SMMEs’ tax compliance costs. This finding may be important to all revenue authorities who wish to ensure improved taxpayer compliance.
Suggested Citation (APA 7th)
Dixon, H., Smulders, S., Odendaal, E. (2025). Power and Trust as Determinants of Tax Compliance Costs. International Journal of Applied Research in Business and Management, 6(1). https://doi.org/10.51137/wrp.ijarbm.2025.hdpc.45755
