Taxpayers’ Attitudes and Its Influence on Compliance to TRAIN Law

Abstract

This research was conducted to enhance the tax knowledge in the National Capital Region of the Philippines and in particular to provide insight how individual taxpayers’ attitudes affect tax compliance decisions to the Tax Reform for Acceleration and Inclusion (TRAIN) Law in the Philippines. Survey responses from questionnaires administered to self-employed or small and medium scale business owners, professionals, and mixed income earners in the NCR were quantitatively analyzed. This study made use of both the descriptive research method and inferential statistics. The study sought to address the following three hypotheses: (1) Perception of tax burden under TRAIN does not significantly influence taxpayers’ attitudes and does not positively correlate with tax compliance to TRAIN; (2) Taxpayers’ level of understanding of the TRAIN law does not significantly influence taxpaying attitudes and does not positively correlate the individual’s tax compliance to TRAIN; (3) Taxpayers’ perceptions of government accountability do not significantly influence taxpayers’ attitudes and do not positively correlate with tax compliance to TRAIN decisions. The study adopted a cross-sectional analysis as data was only collected at one occasion in time, particularly from January 24to February 2, 2018, and it represents the responses of the respondents at that point in time. The findings revealed that taxpayer perception of government accountability and taxpayer perception of tax burden under TRAIN were significant predictors of taxpayers’ attitude. The taxpayer level of understanding of TRAIN law was found to be insignificant. The findings further showed that taxpayer attitude towards compliance are significantly related to taxpayer perception towards government accountability, taxpayer level of understanding of TRAIN law, and taxpayer perception of tax burden under TRAIN. To address issues on tax non-compliance, the tax reform must be supported with the accompanying enhancement of the quality of tax administration and enforcement. The taxpayer perception towards the new tax system and government accountability should be properly addressed.