The Moderating Role of Moral Obligation on the Relationship between Non -Economic Factors and Tax Evasion among SMEs: A Conceptual Framework

Abstract

Globally, Tax evasion has always been a continual defiance to policy makers. A developing nation is primarily reliant on tax revenue and foreign aids to keep the country afloat. To provide sufficient tax revenue, efficient tax collection and competent tax administration are required. Understanding the determinants that influence tax evasion, and the proper solutions to address these factors, can help to reduce the negative repercussions of tax revenue loss in both developing and developed countries globally. This is a conceptual paper of a future study based on the survey of previous literatures, particularly the socio-psychological theories. Subsequently, this study debates that integrating non-Economics factors, namely Peer Influence, Tax Fairness and Tax Complexity, together could probably better demonstrate tax evasion determinants. Consequently, the goal of this research is to give a proposed conceptual framework for the role of moral obligation in moderating the relationship between peer influence, tax justice, tax complexity, and tax evasion among small and medium enterprises (SMEs). The current study makes a theoretical contribution by emphasizing the role of moral obligation in moderating the relationship between non-economic factors and tax evasion among SMEs. Keywords