A better understanding of what motivates taxpayers to participate in, and comply with, a tax system is valuable for all countries and stakeholders. Tax administrations can benefit from increased compliance and higher revenues, taxpayers (both businesses and individuals) are better served by tax systems that understand and are responsive to their needs, while increased data and discussion can help researchers deepen their understanding. In addition, such understanding can help organisations, such as civil society groups, improve communication on taxation, and development partners to maximise the impact of development assistance.

All countries and stakeholders can benefit from a deeper understanding of what motivates taxpayers to participate in, and comply with, the tax system. Increasing that knowledge can provide the impetus for the design of more effective and responsive tax systems that increase voluntary tax compliance. Thus, while this report is primarily focussed on development considerations, the findings and recommendations are likely to be of interest to a wider range of countries and stakeholders.

This chapter focuses on the drivers of tax morale of individuals.  Using micro-econometric analysis of public opinion surveys at the global and regional levels it identifies a number of socio-economic and institutional factors that influence tax morale. The chapter also discusses a number of policy responses to help build tax morale, including taxpayer education programmes, behavioural economics approaches, and hypothecated taxes. While more detailed country level analysis is required before embarking on concrete policy changes, the overview provided in this chapter provides a starting point for discussion and further research on the role of tax morale in developing countries.

This chapter focuses on tax morale in businesses, where there is limited existing research, especially in relation to developing countries. The chapter uses new data on tax certainty as a proxy for tax morale, to identify some of the factors likely to influence MNEs, and possible policy responses.  In addition, in recognition of the limitations of tax certainty as a proxy, further research opportunities are identified including assessing the role of voluntary tax and business principles on MNE tax morale.