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Antecedents of taxpayers’ intentions to engage in tax evasion: evidence from

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 Journal of Financial Reporting and Accounting
Antecedents of taxpayers’ intentions to engage in tax evasion: evidence from
Barbados
Philmore Alleyne, Terry Harris,
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JFRA
15,1
2 Philmore Alleyne
Received 2 December 2015
Revised 6 May 2016
Accepted 23 August 2016
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Journal of Financial Reporting and
Accounting
Vol. 15 No. 1, 2017
pp. 2-21
© Emerald Publishing Limited
1985-2517
DOI 10.1108/JFRA-12-2015-0107
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1985-2517.htm
Antecedents of taxpayers’
intentions to engage in tax
evasion: evidence from Barbados
Department of Management Studies, University of the West Indies,
Bridgetown, Barbados, and
Terry Harris
Durham University Business School, Durham University, Durham, UK
Abstract
Purpose – Tax evasion has been a major problem for governments around the world, with innovative and
ever-changing schemes making the practice increasingly difficult to regulate. In light of this, this study aims
to use the extended version of the theory of planned behaviour (TPB) (Beck and Ajzen, 1991) to predict
individuals’ intentions to engage in tax evasion.
Design/methodology/approach – The research adopts a two-stage approach for data collection and
analysis. First, the authors obtained survey data from 150 taxpayers in Barbados to conduct multivariate
analyses to test the validity of the study’s hypotheses. The authors also used several open-ended questions on
the survey instrument to conduct thematic analyses to further explore the influence of the antecedents of
intentions to engage in tax evasion. Second, the authors conducted a focus group with two tax officials and
three tax advisors.
Findings – The authors find that attitudes toward the behaviour, perceived behavioural control and moral
obligation are significant predictors of intentions to engage in tax evasion. Factors cited as encouraging tax
evasion are perceived fairness, tax authorities’ institutional infrastructure and responses, potential financial
benefit, perceptions of inequality, low level of trust in tax authorities, perceived poor use of tax revenues and
poor treatment of taxpayers. Conversely, factors cited as discouraging tax evasion include fear of prosecution,
high morals and potential adequate governmental regulation.
Research limitations/implications – The study measures intentions to engage in tax evasion rather
than actual behaviour. The study does not measure social desirability bias.
Originality/value – This paper tests the applicability of variables used in the extended version of the TPB
to predict intentions to engage in tax evasion in a Caribbean-based emerging economy. It also applies a
mixed-methods approach of collecting data from taxpayers, tax advisors and tax officials.
Keywords Attitudes, Perceived behavioural control, Moral obligation, Subjective norms,
Tax evasion, Extended version of the theory of planned behaviour
Paper type Research paper
1. Introduction
Benjamin Franklin infamously quoted “nothing is certain except death and taxes”. While
still seemingly true, it has nowhere near the same emphasis that it once had with regard to
taxes. The amount one pays in taxes has been and will always be a contentious issue for
governments. Since biblical times, Zacchaeus had his troubles in collecting taxes for the
Romans. In today’s world, this remains very much the same as persons now pay taxes to
their governments. As the world has evolved, tax compliance has taken a back seat with tax
avoidance and tax evasion being at the forefront of the taxpayer’s main objective. Tax
avoidance is the use of legal means to reduce one’s tax liability (e.g. taking advantage of
 tax provisions), while tax evasion is the use of illegal means to reduce that tax liability (Jones Taxpayers’
and Rhoades-Catananch, 2010, p. 4). The literature has highlighted the sensitivity of tax and intentions
the related problems with tax evasion (Kamaluddin and Madi, 2005; Nor et al., 2010).
In light of innovative tax avoidance and tax-evasion schemes, the regulation on
compliance has become so extensive that tax avoidance today may be considered as tax
evasion tomorrow[1]. Despite this, it is evident to see that while people still pay taxes as they
should and are lawfully required to, they do not conform to the full extent of their obligation;
this has led to increasing levels of tax evasion which, in many cases, go unnoticed for a
3
number of years before detection, if ever detected. Instead, much is done to pay as little taxes
as possible through tax avoidance schemes such as redirecting, postponing and changing
income; or through tax evasion schemes such as understating income, overstating
deductions and falsifying records.
Tax evasion is often seen as an unethical practice and is therefore met with much criticism
from various interest groups. Consequently, this is where ethics has left its imprint on the
world of taxes as people seek to justify their lack of compliance one way or the other. In recent
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years, tax evasion has become a serious issue for governments as citizens believe that there
is no need for them to pay so much taxes, especially when they do not see the benefits of it or
there is the lack of a mechanism in place to collect taxes efficiently (McGee, 1999). This has
left governments facing financial difficulties as they are unable to raise enough finances to
run their countries, implement sound economic policies and provide essential products and
services to its citizens (Pirttila, 1999). This results in fiscal deficits and contributes to a
country having to borrow money from other countries and/or financial institutions such as
the International Monetary Fund (IMF), which puts further strain on already fragile
developing economies.
As a developing country, Barbados is a small English-speaking island nation located in
the Caribbean. The island is a former British colony where sugar production was the main
economic activity historically. In recent decades, Barbados has developed a mixed economy
largely based on tourism, international business, manufacturing and agricultural sectors.
According to the World Bank, Barbados is classified as a high-income country with gross net
income (GNI) above US$15,300 per capita (World Bank Group, 2016). The island is estimated
to have a population of approximately 283,000 individuals, where roughly 95 per cent are
African descendants from the slave trade. The country has major taxes such as
pay-as-you-earn tax (PAYE), corporation tax, consolidation tax and value added tax (VAT),
which are administered through a central agency, the Barbados Revenue Authority (BRA)
under the control of the Ministry of Finance. The VAT was introduced in 1997 as part of an
IMF programme to generate revenues to reduce the fiscal deficits. As it relates to the study
population, preliminary evidence suggests that tax evasion is a growing problem, given that
over the past decade the island has been struggling with stagnant revenues despite the
imposition of new taxes. Citing tax evasion as the main reason, Economic Commission for
Latin America and the Caribbean (ECLAC) (2016) estimates that there was a shortfall of
US$320 bn in the tax systems in the Latin America and Caribbean region in 2014.
This study is important for a number of reasons. First, this study focuses on tax evasion
in light of the numerous social and economic problems which governments are being faced
with due to this unethical practice. Using an extended version of the theory of planned
behaviour (TPB) (Ajzen, 1991), the study explores behavioural intentions to engage in tax
evasion. Second, the Barbados case provides insights into the phenomenon of tax evasion in
a democratic, politically stable and demographically homogenous emerging economy. The
identification of the predictors of taxpayers’ intentions to engage in tax evasion is arguably
more important in emerging economies, given the 2007/2008 global financial crisis where
 JFRA many of these economies (particularly those in the Caribbean) have failed to recover
15,1 meaningfully from the financial shock. Many of these nations are now plagued with serial
budget deficits caused, in part, by a reduction in government tax receipts. Third, given the
lack of research done on tax evasion using the extended TPB in emerging economies, this
work deepens the understanding of what motivates individuals in these societies to engage
in tax evasion.
4 The paper is structured as follows: the following sections present a selective review of
literature on tax evasion, the research methods and the results of the study. The final section
concludes the paper.

2. Literature review
2.1 Ethics of tax evasion
Ethics can be defined as normative systems of rules of conduct developed to provide
guidance in social or interpersonal settings (Hogan, 1973). According to Arens et al. (2008),
ethics is seen as the glue that holds a society together and is therefore crucial to an orderly
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functioning society. McGee (2006) highlights three basic views on the ethics of tax evasion.
These are:
(1) tax evasion is considered unethical;
(2) there is never any duty to pay taxes because the state is illegitimate and has no moral
authority to take anything from anyone; and
(3) tax evasion may be ethical under some circumstances and unethical under other
circumstances.

An individual’s decision to engage in tax evasion may be influenced by a number of factors.

2.2 Tax evasion in developing countries

Developing countries are often characterized by many small organizations, with agriculture
representing a major component of total output and employment, a substantial informal
sector and poor administrative capacity (Tanzi and Zee, 2000; Bird and Zolt, 2008). As a
result, Tanzi and Zee (2000) argue that there is great difficulty in providing reliable and
detailed tax statistics. In Armenia, McGee (1999) finds that tax evasion is easy given the lack
of adequate mechanisms to collect taxes and the widespread belief that the citizens do not
owe anything to the government because the government does nothing for them. Torgler
(2005) finds that the tax burden, lack of honesty and corruption are deemed the principal
reasons for tax evasion in Latin America. The literature also shows that in developing
countries, if taxpayers perceive that they are treated fairly by the tax authorities, trust
officials and the level of service is high, taxpayers are more willing to pay taxes (Tanzi and
Zee, 2000; Torgler, 2005; Alm and Martinez-Vazquez , 2007). Prior literature also shows that
taxpayers in high-income categories are more likely to engage in tax evasion than
low-income earners due to having more resources to hide (Pirttila, 1999).

2.3 Theoretical framework – intentions to engage in tax evasion

The theory of reasoned action (TRA) puts forward that behavioural intentions are influenced
by attitudes and subjective norms (Fishbein and Ajzen, 1975). Hanno and Violette (1996) find
general beliefs about taxes are influenced by attitudes and subjective norms. Later, Ajzen
(1991) advances the TPB which seeks to explain an individual’s intention to perform a given
behaviour using three factors: attitudes towards the behaviour, subjective norms and
perceived behavioural control, and finally that the individual’s behavioural intentions
 should influence actual behaviour. Beck and Ajzen (1991) add moral obligation as an Taxpayers’
antecedent to the TPB to form the extended version of the TPB. intentions
Prior research has used the TPB to predict intentions to engage in tax behaviour (Bobek
and Hatfield, 2003; Bobek et al., 2007). It is recognised in the literature that researching the
actual unethical behaviour has several difficulties including access, locating actual
perpetrators and possible censoring of the information (Alleyne et al., 2013). Consequently,
researchers have resorted to using intended actions rather than actual behaviour to measure
(un)ethical behaviour. Prior research has used survey methods, scenarios and cases to 5
measure ethical intentions (Bobek and Hatfield, 2003; Alleyne and Phillips, 2011).

2.4 Attitudes towards the behaviour (of tax evasion)

Attitude may be defined as the evaluation or assessment of the favourableness or
unfavourableness of an attitude object (Ajzen and Fishbein, 1980; Beck and Ajzen, 1991). The
literature has identified examples of tax attitudes as perceived fairness (Hite and Roberts,
1992), potential for financial gain (Baldry, 1987) and perceived trust in authorities (Torgler,
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2005). Previous studies have reported a significant positive relationship between attitude
and tax evasion behaviour (Eriksen and Fallan, 1996; Trivedi et al., 2005; Kirchler et al.,
2008). Alabede et al. (2011) determine that taxpayers’ attitudes towards tax evasion are
significantly related to their compliance. Bobek and Hatfield (2003) also find that attitudes
influence tax compliance. Thus, taxpayers with unfavourable attitudes towards tax evasion
(poor attitudes) are less likely to engage in tax evasion. In contrast, taxpayers with
favourable attitudes towards tax evasion (good attitudes) are more likely to engage in tax
evasion. Thus, the first hypothesis is presented as follows:
H1. Individuals’ attitudes toward tax evasion are positively related to intentions to
engage in tax evasion in Barbados.

2.5 Subjective norms

Subjective norms (significant others) are the influence of referent others (Ajzen, 1991).
Individuals or groups such as peers, co-workers, family and friends may have an impact on
the decision-making of others based on how they perceive the behaviour, whether or not they
would endorse it, and to what extent persons are motivated to conform to their views (Beck
and Ajzen, 1991). The level of support for or against the specific behaviour can influence
one’s intentions to engage in the activity (Fishbein and Ajzen, 1975). Scholz et al. (1992) find
that the opinion of others is the most important factor influencing the change in respondents’
commitment to comply with taxes. Kirchler et al. (2008) argue that if taxpayers believe that
non-compliance is widespread and approved by their referent group, they are more likely to
be non-compliant as well. Previous studies have found a relationship between perceived
subjective norms (referent others) and tax evasion (Cullis and Lewis, 1997; Bobek and
Hatfield, 2003; Richardson, 2006; Tsakumis et al., 2007). Thus, we argue that taxpapers, who
perceive that significant others approve of tax evasion, are more likely to engage in the
behaviour. In contrast, where significant others disapprove of tax evasion behaviour,
taxpayers are less likely to engage in tax evasion. Given this research, the next hypothesis is
presented as follows:
H2. Individuals’ subjective norms are positively related to intentions to engage in tax
evasion in Barbados.

2.6 Perceived behavioural control

Perceived behavioural control is the degree of control an individual perceives he or she may
have to engage in a particular behaviour (Ajzen, 1991; Beck and Ajzen, 1991; Bobek and
 JFRA Hatfield, 2003). The fundamental determinant for perceived behavioural control is an
15,1 individual’s belief regarding the existence of resources and opportunities in addition to
obstacles and impediments to engage in the behaviour. Higher perceived behavioural control
is more likely to result in greater intentions to perform the behaviour (Ajzen, 1991). Carnes
and Englebrecht (1995) find that the perception of detection risk (i.e. the thought of being
caught) has a greater influence on individuals’ compliance choices. Bobek and Hatfield (2003)
6 highlight that perceived behavioural control entails how much control an individual believes
that he or she may have to carry out a specific behaviour (e.g. understating income,
overstating deductions and falsifying records). Prior tax research has identified opportunity
as an important determinant in non-compliance and tax evasion (Carnes and Englebrecht,
1995; Antonides and Robben, 1995; Robben et al., 1990). We argue that individuals with low
perceived behavioural control (great difficulty and obstacles) are less likely to engage in tax
evasion. Conversely, individuals with high perceived behavioural control (perceived ease)
are more likely to engage in tax evasion. Thus, the third hypothesis is presented as follows:
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H3. Individuals’ levels of perceived behavioural control are positively related to

intentions to engage in tax evasion in Barbados.

2.7 Moral obligation

Beck and Ajzen (1991) add moral obligation to the model in what is considered an extended
version of the theory of planned behaviour. They find moral obligation to be influential in
predicting intentions and further increasing the predictive power of the model. Moral
obligation is a duty that one believes he or she may have due to their considerations of right
and wrong (Ajzen, 1991). Reckers et al. (1994) recognise that tax evasion is simply one of the
many decisions that individuals make throughout life that evoke ethical beliefs, and failure
to consider the possible consequences of moral beliefs could lead to confounding results.
Furthermore, Reckers et al. (1994) find that moral obligation predicts tax evasion, and they
argue that if a behaviour is considered immoral, then it will not be engaged in. Bobek and
Hatfield (2003) and Riahi-Belkaoui (2004) also find support for perceptions of moral
obligations influencing tax compliance. McGee (1999) finds that taxpayers in Armenia
generally agree that there is no moral obligation to pay taxes. We argue that the higher an
individual’s sense of moral obligation, the less likely it is that he or she will engage in tax
evasion. Thus, the fourth and final hypothesis is presented as follows:
H4. Individuals’ levels of moral obligation are negatively related to intentions to engage
in tax evasion in Barbados.
The tax evasion intention model is represented in Figure 1.

3. Research methods
3.1 Study design – quantitative survey phase
The compilation of data for the study was conducted using a quantitative approach that was
administered by way of a survey research design. It consisted mainly of closed-ended
structured questions with the exception of two final open-ended ones. This method was
chosen to encourage participants to attempt all the questions and ensure that respondents
provided data that would help meet the specific needs of the study. The survey research
method of delivery was also easier and quicker to administer, and respondents were more
likely to answer about the sensitive topic under study.
 Attitudes Taxpayers’
toward intentions
the behaviour

H1
Subjective
norms
H2
7
Intentions to
engage in tax
H3 evasion
Perceived
behavioural
control
H4

Figure 1.
Moral
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Tax evasion intention

obligation
model

3.2 Sample requirements

The target population consisted of taxpayers in Barbados. The sample size for this study
was determined based on Green’s (1991) rules of thumb of n ⬎ 50 ⫹ 8k (where k is the
number of independent variables) when testing R2, and n ⬎ 104 ⫹ k when testing
individual Bj values. According to Green (1991), when the sample size is any smaller, it
becomes increasingly risky to generalize regression results beyond the sample.
Furthermore, Cohen et al. (2003) posited that sample size is extremely important when
conducting multiple regression analysis. This is because without a sufficiently large
sample size, a research study may not possess sufficient statistical power to detect a
significant effect. Thus, this study required at least 108 cases, given the four predictors.
Hence, the sample of 150 participants obtained was deemed adequate.

3.3 Research instrument

The survey questionnaire was broken down into seven sections, which focused on:
(a) demographics, (b) attitudes towards the behaviour (tax evasion), (c) subjective norms, (d)
perceived behavioural control, (e) moral obligation, (f) intentions, and (g) factors encouraging
and discouraging tax evasion. Section A, demographic factors, gathered data such as age,
gender, annual income, work experience, job level and level of education.
Section B focused on the variable, attitudes towards tax evasion, which was measured
with seven statements adapted from Beck and Ajzen (1991) and Bobek and Hatfield (2003),
using seven-point anchored scales. A sample item on this scale was “Taxation is (bad-good)”.
All items in this scale were averaged to form a composite score for attitudes towards tax
evasion. Higher scores indicated favourable (or accepting) attitudes towards tax evasion,
whereas lower scores indicated unfavourable (or unaccepting) attitudes towards tax evasion.
The Cronbach’s alpha for the attitude scale was 0.83.
Section C focused on subjective norms which was measured with four statements
adapted from Beck and Ajzen (1991) and Bobek and Hatfield (2003), using seven-point
anchored scales. A sample item on this scale was “Most people I know would approve of
me cheating on taxes (disagree-agree)”. All items in this scale were averaged to form a
composite score for subjective norms. Higher scores indicated perceptions that
significant others endorse (or favour) tax evasion, whereas lower scores indicated
 JFRA perceptions that significant others do not endorse (or do not favour) tax evasion. The
15,1 Cronbach’s alpha for the subjective norms scale was 0.77.
Section D focused on perceived behavioural control, which was measured with four
statements adapted from Beck and Ajzen (1991), using seven-point anchored scales. A
sample item on this scale was “For me to cheat on taxes, it is (difficult-easy)”. All items
in this scale were averaged to form a composite score for perceived behavioural control.
8 Higher scores indicated higher perceived behavioural control (perceived ease) in
engaging in tax evasion, whereas lower scores indicated lower perceived behavioural
control (perceived difficulty). The Cronbach’s alpha for the perceived behavioural
control scale was 0.80.
Section E focused on moral obligation, which was measured with four items adapted from
Bobek and Hatfield (2003) and Beck and Ajzen (1991), using seven-point anchored scales. A
sample item on this scale was “I think it would be morally wrong to engage in tax evasion
(disagree-agree)”. All items in this scale were averaged to form a composite score for moral
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obligation. Higher scores indicated high levels of moral obligation, whereas lower scores
indicated low moral obligation. The Cronbach’s alpha for the moral obligation scale was 0.87.
Section F focused on intentions to engage in tax evasion, which was measured with
three statements adapted from Beck and Ajzen (1991), using seven-point anchored
scales. A sample item on this scale was “If I had the opportunity, I would cheat on taxes:
(unlikely-likely) ”. All items in this scale were averaged to form a composite score for
subjective norms. Higher scores indicated high intentions to engage in tax evasion,
whereas lower scores indicated low intentions to engage in tax evasion. The Cronbach’s
alpha for the intentions scale was 0.88.
Cronbach’s alpha for each scale were greater than 0.70, thus representative of high
internal reliabilities (Nunnally, 1967)[2]. The final part of the questionnaire (Section G)
asked respondents to identify factors which encourage and discourage tax evasion in
Barbados. We used two open-ended questions to explore these factors.

3.4 Data collection procedures

Data collection covered three weeks in April 2015. Prior to distribution, the questionnaire
was first piloted to three academics so as to meet the specific needs of the study and ensure
that respondents had a good understanding of what was being asked. We used a convenience
sampling process as participants were chosen on the basis of being accessible (Neuman,
2006). This method was chosen, given that it is relatively inexpensive, quick and easy to
carry out. This type of sampling is also useful when the population is widely dispersed
making other sampling methods inefficient (Neuman, 2006). No incentives were offered to
any participants so as to ensure their participation was entirely voluntary.
We targeted taxpayers (i.e. individuals who held jobs) in the three main towns in the
island. From the 250 questionnaires delivered by hand to respondents, 156 questionnaires
were returned. Six questionnaires were discarded due to missing data. As a result, we
obtained 150 usable questionnaires, representing a final usable response rate of 60 per cent.
Table I summarizes the various demographic factors of respondents and highlights that
56.6 per cent of respondents in the 29 years and under categories. Gender is fairly evenly
distributed in the male/female ratio. Majority of the sample (64.7 per cent) work for an annual
income of less than and equal to $50,000[3]. The characteristics of the sample compare
favourably with those of previous studies on Barbados taxpayers in terms of gender, work
experience and income distributions (Alleyne and Howard, 2003; Moore, 2008).
 Demographic factors Frequency (N) (%)
Taxpayers’
intentions
Age
Under 20 years 6 4.0
20-29 years 79 52.6
30-39 years 30 20.0
40-49 years 25 16.7
50 years and over 10 6.7 9
Total 150 100.0
Gender
Male 74 49.3
Female 76 50.7
Total 150 100.0
Annual income
$50,000 and under 97 64.7
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$50,001-$99,999 37 24.6
Over $100,000 16 10.7
Total 150 100.0
Work experience
1-2 years 28 18.7
3-5 years 36 24.0
6-9 years 31 20.6
10 years and over 55 36.7
Total 150 100.0
Job level
General workers 39 26.0
Clerical 21 14.0
Supervisory 25 16.6
Managerial 10 6.7
Self-employed 10 6.7
Other 45 30.0
Total 150 100.0
Education level
Secondary 20 13.3
Undergraduate 74 49.4
Post-graduate 50 33.3 Table I.
Other 6 4.0 Characteristics of the
Total 150 100.0 sample

3.5 Ethical considerations

In conducting the research, participants were first made aware of the nature and purpose
of the study. Consent was obtained before any data were collected. Respondents were
made aware that participation was entirely voluntary, and they could withdraw from the
study at any time. These instructions were written on the questionnaire. No names,
addresses or contact information were collected so as to ensure data collected would be
anonymous. Questions were carefully constructed so as not to be ambiguous or
misleading and thus not deceive participants. Anticipation of the repercussions of the
research was also considered to ensure no harm, whether physical or psychological that
arose to the participants. These practices were put into place to remove any ethical
 JFRA issues, which may have been faced, especially given the sensitive and potentially
15,1 incriminating nature of the study.

3.6 Data analysis

To perform preliminary exploratory data analysis, we used descriptive statistics and
Pearson’s correlations. We used hierarchical multiple regression analysis to test the research
10 hypotheses[4].

3.7 Thematic analysis

We also conducted thematic analysis on the two open-ended questions in the
questionnaire. These two questions asked respondents to identify factors which
encourage and discourage tax evasion. These two questions were used to further explore
some of the data arising from the quantitative analysis. We used Miles and Huberman’s
(1994) thematic approach to analyse the data. We independently analysed the responses
and then came together to compare notes to arrive at a consensus on the key themes and
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patterns.

3.8 Focus group phase

In the final stage of the research, we conducted a focus group with tax advisors (experts or
advisors in tax advisory services) and tax authorities to explore their perspectives and
experiences in tax evasion when dealing with taxpayers. We contacted the various
organizations and individuals and informed them of the nature of the research. Five persons
agreed to participate in the research. The sample included two income tax officials (tax
authorities) (one male and one female, with over 30 years’ work experience each), and three
professional chartered accountants (tax advisors) (one male with 35 years’ work experience;
one female with 20 years’ work experience; one female with 12 years’ work experience). We
started the focus group by sharing the results of the earlier phase of the study. We also
observed the interaction and the influence of dominant members in the discussion. Members
knew each other and appeared to be comfortable in the setting. The data were collected via
notes taken by the authors and a research assistant who later performed separate thematic
analysis and compared notes to form a consensus on agreed themes.

4. Results
4.1 Descriptive statistics
Table II highlights that respondents generally hold strong unfavourable attitudes
towards tax evasion, with overall attitudes having a mean of 2.77. The overall mean for
subjective norms in Table III is 3.10, which is lower than the composite scale midpoint of
4. This finding suggests that individuals perceive that significant others (peers, family
and friends) would disapprove of tax evasion behaviour.
Table IV shows that respondents believe that they would find difficulty (i.e. low perceived
behavioural control) in engaging in tax evasion (Mean ⫽ 3.19). This is consistent throughout
the component, as none of the questions report any overall perceived ease in carrying out tax
evasion with a mean of 3.52 being the highest reported of all the questions. Table V reports
that respondents perceive it is morally wrong to engage in tax evasion (Mean ⫽ 5.54).
Descriptive statistics for intentions also produce considerably low intentions to engage in tax
evasion with an overall mean of 2.70 (Table VI).

4.2 The relationship of the study’s variables

Table VII shows stronger unfavourable attitudes towards tax evasion, higher levels of
influence by others who disapprove of tax evasion, lower levels of perceived behavioural
 Taxpayers’
intentions
Items Mean SD

Tax evasion is (bad-good) 2.12 1.49

Engaging in tax evasion is (foolish-wise) 2.13 1.54
Tax evasion can be (useless-useful) 3.41 2.07
I find the concept of tax evasion (unattractive-attractive) 2.55 1.82 11
I think I would pay less taxes if I engaged in tax evasion (unlikely-likely) 4.23 2.33
I would be pleased if I paid less taxes because I engage in tax evasion
(disagree-agree) 2.86 2.03 Table II.
Cheating on taxes is (unpleasant-pleasant) 2.11 1.62 Descriptive statistics
Overall average 2.77 1.32 for attitudes toward
the behaviour
Note: SD ⫽ Standard deviation (Tax evasion)
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Items Mean SD

Most people I know would approve of me cheating on taxes (disagree-agree) 2.37 1.89
If I cheated on my taxes, most people who are important to me would
(disapprove-not care) 2.54 1.97
No one who is important to me thinks it is ok to cheat on taxes (disagree-agree) 4.33 2.24
Most people who are important to me will look down on me if I cheat on taxes
(likely-unlikely) 3.15 2.10
Overall average 3.10 1.38 Table III.
Descriptive statistics
Note: SD ⫽ Standard deviation for subjective norms

Items Mean SD

For me to cheat on taxes, it is (difficult-easy) 2.61 1.87

If I want to, I can cheat on taxes (false-true) 3.52 2.32
I can imagine times when I might cheat on taxes even if I hadn’t
planned to (unlikely-likely) 3.27 2.08
Even if I had a good reason, I could not bring myself to cheat on
taxes (unlikely-likely) 3.37 2.35 Table IV.
Overall average 3.19 1.57 Descriptive statistics
for perceived
Note: SD ⫽ Standard deviation behavioural control

Items Mean SD

I think it would be morally wrong to engage in tax evasion

(disagree-agree) 5.53 1.96
I would not feel guilty if I cheated on taxes (true-false) 5.24 2.15
Cheating on taxes goes against my principles (disagree-agree) 5.54 1.99
It would be morally wrong for me to cheat on taxes(unlikely-likely) 5.85 1.70
Overall average 5.54 1.66 Table V.
Descriptive statistics
Note: SD ⫽ Standard deviation for moral obligation
 JFRA control and higher moral obligation lead to lower intentions to engage in tax evasion. Moral
15,1 obligation records the strongest relationship, followed by perceived behavioural control,
attitudes and finally subjective norms.

4.3 Hierarchical regression analyses for intentions to engage in tax evasion

12 We control for the potential effects of age, gender, income, work experience and job level. We
test the hypotheses using hierarchical regression analyses. The control variables (age,
gender, income, work experience and job level) are entered first as a block and followed by
another block containing the hypothesised independent variables. Preliminary tests for
multi-collinearity reveal no problems with the data[5].
Table VIII shows the results for the influence of independent variables on intentions to
engage in tax evasion. In Model 1 (Step 1), the control variables show significant
relationships between the variables (gender and income level) and the dependent variable
(adjusted R2 ⫽ 0.10, F ⫽ 4.31, p ⬍ 0.01). Model 2 (Step 2) is statistically significant, and it
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explains 58 per cent of the variance (adjusted R2 ⫽ 0.58, F ⫽ 23.77, p ⬍ 0.01). The results
show that income level, as a control variable, is found to be significant (␤ ⫽ 0.20, t ⫽ 3.12,
p ⬍ 0.01)[6]. This finding indicates that higher income level taxpayers are more likely to
engage in tax evasion than taxpayers in the lower income categories, as has been found in
other studies (Pirttila, 1999). Significant independent variables are attitudes towards tax
evasion, perceived behavioural control and moral obligation. The variable, attitudes towards
tax evasion is found to be significantly related to intentions to engage in tax evasion (␤ ⫽
0.23, t ⫽ 3.49, p ⬍ 0.01). This finding indicates that individuals with unfavourable attitudes
towards tax evasion are less likely to engage in tax evasion. Perceived behavioural control is
found to be significantly related to intentions to engage in tax evasion (␤ ⫽ 0.37, t ⫽ 6.37,
p ⬍ 0.01). This result shows that individuals with low perceived behavioural control are less
likely to engage in tax evasion. Moral obligation is found to be significantly related to
intentions to engage in tax evasion (␤ ⫽ ⫺0.35, t ⫽ ⫺4.72, p ⬍ 0.01). This finding indicates
that individuals with high moral obligation are less likely to engage in tax evasion. Thus,
hypotheses H1, H3 and H4 are fully supported. Interestingly, no support is found for the
influence of subjective norms on intentions to engage in tax evasion (␤ ⫽ 0.03, t ⫽ 0.55, p ⬎
0.05). Thus, no support is found for H2.

4.4 Factors which encourage and discourage tax evasion

Thematic analysis is conducted on data in relation to factors that would encourage or
discourage tax evasion[7]. In terms of factors that would encourage tax evasion, the themes
ranked in order of most responses are:

Items Mean SD

If I had the opportunity, I would cheat on

taxes (unlikely-likely) 2.68 2.13
I would never cheat on taxes (true-false) 2.85 2.13
I may cheat on taxes in the future
Table VI. (unlikely-likely) 2.58 2.00
Descriptive statistics Overall average 2.70 1.88
for intentions to
engage in tax evasion Note: SD ⫽ Standard deviation
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Variables M SD 1 2 3 4 5 6 7 8 9 10

Controls
1 Age (years) 2.69 1.02 (⫺)
2 Gendera 1.51 0.50 0.18* (⫺)
3 Income levelsb 1.35 0.48 0.36** 0.03 (⫺)
4 Work experiencec 2.79 1.12 0.67** 0.08 0.43** (⫺)
5 Job levelsd 3.44 2.01 0.28** ⫺0.16 0.17* 0.26** (⫺)
Independents
6 Attitudes toward the behaviour 2.77 1.32 ⫺0.15 ⫺0.16 ⫺0.04 ⫺0.05 0.07 (0.83)
7 Subjective norms 3.10 1.38 ⫺0.08 ⫺0.02 ⫺0.07 ⫺0.04 ⫺0.04 0.41** (0.77)
8 Perceived behavioural control 3.19 1.57 ⫺0.01 ⫺0.21* 0.04 0.02 0.18* 0.26** 0.17* (0.80)
9 Moral obligation 5.54 1.66 0.25** 0.17* 0.15 0.05 ⫺0.09 ⫺0.56** ⫺0.53** ⫺0.24** (0.87)
Dependent
10 Intentions to engage in tax evasion 2.70 1.88 ⫺0.06 ⫺0.25** 0.23** 0.03 0.15 0.52** 0.36** 0.54** ⫺0.60** (0.88)
a b
Notes: ** p ⬍ 0.01; * p ⬍ 0.05; M ⫽ Mean; SD ⫽ Standard deviation; 1 ⫽ male, 2 ⫽ female; 1 ⫽ $50,000 and under (n ⫽ 97), 2 ⫽ greater than $50,000 (n ⫽ 53);
c
1 ⫽ 1-2 years, 2 ⫽ 3-5 years, 3 ⫽ 6-9 years, 4 ⫽ 10 years and over; d1 ⫽ general workers, 2 ⫽ clerical, 3 ⫽ supervisory, 4 ⫽ managerial, 5 ⫽ self-employed, 6 ⫽
other; Alpha reliabilities are shown in parentheses on the diagonal; (⫺) represents single-item variables for which reliabilities cannot be computed

matrix
13

Table VII.
intentions
Taxpayers’

Pearson’s correlation
 JFRA Model 1 Model 2
15,1 Independent variables b S.e. ␤ b S.e. ␤

Control variables
Age ⫺0.25 0.21 ⫺0.13 0.09 0.15 0.05
Gender ⫺0.71* 0.31 ⫺0.19* ⫺0.23 0.21 ⫺0.06
14 Income levels 0.91** 0.34 0.23** 0.74** 0.24 0.20**
Work experience 0.31 0.19 0.18 0.16 0.13 0.09
Job levels 0.17 0.08 0.18 0.04 0.05 0.04
Main effect variables
Attitudes toward the behaviour 0.33** 0.09 0.23**
Subjective norms 0.05 0.09 0.03
Perceived behavioural control 0.44** 0.07 0.37**
Moral obligation ⫺0.40** 0.08 ⫺0.35**
Table VIII.
Results of hierarchical R2 0.13 0.61
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regression analyses on ⌬R2 0.13 0.48

the relationship of Adjusted R2 0.10 0.58
control and F 4.31** 23.77**
independent variables
to the intention to Notes: Dependent variable ⫽ intention to engage in tax evasion; b ⫽ unstandardized betas; S.e. ⫽ Standard
engage in tax evasion errors; ␤ ⫽ Standardized Beta-coefficients; * p ⬍ 0.05; ** p ⬍ 0.01

(1) perceived fairness (high tax rates, perception of inequality and government
influence);
(2) potential financial gain due to the current economic climate;
(3) poor administrative structure and level of service;
(4) perceived poor use of the taxes collected; and
(5) low level of trust in tax authorities.

Factors that would discourage tax evasion produce five major themes. The themes ranked in
order of most responses are: fear of prosecution, high morals, social stigma and potential
adequate governmental regulation.
Participants’ attitudes (perceived fairness and use of tax revenues) are identified by
respondents as major influential factors for tax evasion. Responses include: “very high
rates”, “rates being unfair and unreasonable” and “my income is too heavily taxed”.
Respondents perceive that tax revenues are not being properly utilized. For example, a
respondent notes: “Too much of my hard earned money going into the pockets of government
ministers”. Another respondent further highlights: “High tax rates and not seeing anything
worthwhile being done with the money I paid”. One respondent notes that: “Transparency in
seeing where the money I pay in taxes are utilised”. It is perceived that there is inequality in
the tax system, with persons who have influential contacts or friends and earn substantial
income are able to circumvent the tax system. Based on the economic climate, the potential
for financial benefit is also cited as a motivator of tax evasion (Baldry, 1987). One respondent
reports: “Cost of living may be high; so to reduce my expenses, tax evasion may be the easy
way out”. In our study, attitudes are further shaped by the perceived low level of trust in tax
authorities and the apparent weak administrative structure which results in poor customer
service (Torgler, 2005). Thus, the results here support the quantitative findings that
unfavourable attitudes to paying taxes are likely to lead to tax evasion.
 Perceived behavioural control is found to be a strong predictor of tax evasion. A Taxpayers’
respondent comments: “Surveillance, enforcement of penalties if people are likely to be intentions
caught”. While some perceive that they could get away with tax evasion (under-reporting
income and overclaiming expenses or deductions), respondents generally felt fearful of being
later discovered and penalized. This may be based on the requirements for employers and
other taxpayers to submit all payments for wages and services to individuals to the tax
office’s online system, which is also linked to other governmental departments responsible
for property taxes, customs and excise, vehicle registrations and social security. The online 15
system has mechanisms for tracking the visibility of income. However, this must be assessed
against the perceived considerable length of time that is taken by the tax authorities to
process information. In any event, the online tracking system may create barriers or
difficulties in engaging in tax evasion. Consistent with Carnes and Englebrecht (1995), the
risk of detection influences tax compliance. Thus, low perceived behavioural control
influences low intentions to engage in tax evasion in Barbados. The results here support the
quantitative findings that there is greater difficulty to engage in tax evasion.
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Moral obligation is identified as a key determinant of tax evasion. Respondents highlight

having guilty consciences, a sense of right and wrong and strong Christian beliefs that may
tend to prevent them from engaging in tax evasion. For example, one respondent notes: “The
fact that I am a Christian and it goes against my belief”, while another respondent
commented: “It is unethical to engage in tax evasion”. These results are consistent with the
findings of Bobek and Hatfield (2003). Thus, the results here support the quantitative
findings that strong perceived moral obligation can influence lower intentions to engage in
tax evasion. However, this must be weighed carefully when attitudes and perceived
behavioural control (perceived ease or difficulty) are factored into the decision-making
process of tax evasion. Caution may need to be taken here in the interpretation of these
results, as individuals might want to portray a level of moral uprightness.

4.5 Focus group with tax advisors and tax officials

In our focus group session, we note that the tax officials (authorities) highlight that there is
a significant level of tax evasion on the island. One senior tax officer said that:
[…] we notice that there are times individuals file tax returns, and when they are subsequently
audited, they end up having to pay substantially more than they had filed in the first place. Then
they become quite upset.
The chartered accountants (the tax advisors) hold divergent views to the tax authorities
and perceive that the tax authorities need to be more responsive to taxpayers’ queries
and concerns. It is felt that there is a weak informational system and perceived lack of
sophistication in the tax office on the island, with a slow movement to answer queries,
which can cause reluctance by taxpayers to file correct taxes. Hence, they argue that
taxpayers are forced to make judgement calls in filing tax returns and providing tax
advice. These results are consistent with prior research (Tanzi and Zee, 2000; Torgler,
2005; Bird and Zolt, 2008).
They all agree that most Barbadian taxpayers are likely to engage in tax evasion
based on the attitudes and beliefs that they can do it without being caught. The tax
authorities argue that some taxpayers do not disclose their sources of income. For
example, a tax officer reveals that the tax authorities later find income sources from
either tips or information provided as part of the mandatory online filing by businesses
of annual forms showing all payments to individuals and other parties. These payments,
which include salaries, wages and services performed, assist the tax authorities in
determining the sources of income for individuals. Another tax officer argues that it may
 JFRA also be perceived as lower moral obligation to file all taxes correctly. The tax officials
15,1 also believe that individuals feel that they have some degree of control over their tax
filing.
The tax advisors complain of the tax authority’s lengthy delays in paying tax refunds
and poor treatment of taxpayers (e.g. poor service quality and harsh responses) as key
factors influencing attitudes towards tax evasion in the country, as evidenced by prior
16 studies (Torgler, 2005). They also argue that the tax regime is onerous with high tax
rates, and many forms of taxation (e.g. income tax, corporation tax, VAT, consolidation
tax and property tax) contribute to negative attitudes to paying taxes. Consequently,
taxpayers may perceive that they do not have a moral duty to pay taxes. This lack of
moral duty may also stem from the perception that government does not deliver value for
money in the services that are provided with tax revenues. Table IX summarises the
emerging themes for the two open-ended questions and the focus group session with tax
advisors and tax officials.
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Variables Results

Intentions to engage in tax
evasion
Attitudes
Subjective norms
Perceived behavioural control
Moral obligation
Table IX.
Thematic analysis
Likely but contingent on the strength of the below factors
Encouraging tax evasion Discouraging tax
evasion
Perceived fairness Increased governmental
regulation
High tax rates Transparency
Complexity of the tax code
Too many forms of taxation
Government influence
Perception of inequality
Potential financial benefit
Economic climate (high cost of
living)
Financial influence
Poor service and use of taxes
Perceived poor use of the taxes
collected
Poor treatment of taxpayers
Low trust
Low level of trust in tax authorities
lack of accountability
Following their peers and others in
society
Some confidence in not being Fear of prosecution
caught
Lengthy and tardy response to Penalties
taxpayers
Reporting requirements
via online system
Lower moral obligation High morals
Going against one’s ethical A sense of what is right
principles
Strong Christian beliefs
 5. Conclusion Taxpayers’
This paper investigates the factors that may influence individuals to engage in tax evasion in intentions
Barbados. Our findings indicate that unfavourable attitudes towards tax evasion, perceived
difficulty to perform the action and a strong sense of moral obligation influence lower intentions
to engage in tax evasion. Thus, support is found for hypotheses H1, H3, and H4 in our study. This
study finds empirical support for the usefulness of Ajzen’s (1991) and Beck and Ajzen’s (1991)
models in predicting intentions to engage in tax evasion. 17
We find strong support for perceived behavioural control as a significant predictor of
tax evasion. This finding is consistent with the results of Robben et al. (1990) and Carnes
and Englebrecht (1995). Given that perceived behavioural control represents
opportunities and obstacles, we argue that tax administration can be improved to serve
as a deterrent to tax evasion. Governments can set penalties for tax evasion as high as
possible as a deterrent, but they must balance that claim against potential abuse by tax
administrators who may be corrupt or harshly penalise the taxpayers for making honest
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mistakes (Slemrod, 2007).

It is recognized that more effective tax audits, using information technology, may be
needed to ensure that tax evasion is reduced. At the moment, there is an online tax filing
system which has been fraught with operational problems and lack of knowledge to rectify
the issues. The use of modern audit technology can assist with the selection of tax returns for
audit purposes of those persons who do not file taxes, under-report income and overclaim
deductions (Alm and Martinez-Vazquez, 2007). Emerging countries like Barbados are also
characterized by the implementation or adoption of systems in developed countries without
regard to the potential, financial and other institutional requirements to affect continual
monitoring and successful implementation. Thus, more financial and institutional support in
the form of training and seminars (Kamaluddin and Madi, 2005), effective staff recruitment
and information technology is needed.
Attitude is found to be a significant predictor of tax evasion in the quantitative phase. Tax
officials perceive favourable attitudes towards tax evasion. Attitudes may be changed by
conducting effective communication programmes such as seminars and the use of the media to
raise public awareness of the need to pay taxes. In addition, given the negative attitudes towards
the tax authorities by the tax advisors, training of tax staff should be provided to raise customer
service levels, when courtesy, helpfulness and convenience should become the norm. The
service-oriented approach should assist in the taxpayer no longer being regarded as a potential
criminal but as a potential client (Bird and Zolt, 2008). In emerging economies, we argue that a
spirit of trust (e.g. allowing more self-declaration by the taxpayer) needs to be considered by tax
policymakers (government) to motivate citizens to pay taxes, thus instilling confidence and
credibility in the capacity to deliver promised returns for taxes collected (Torgler, 2005).
Our finding that moral obligation is a significant predictor of tax evasion is consistent
with the results of Bobek and Hatfield (2003) and Reckers et al. (1994). The findings of the
study also imply the need for greater emphasis to be placed on the practice and enforcement
of ethical behaviour on tax filing. Significant factors such as morals and fear of prosecution
suggest that the endorsement of ethical programmes throughout life and strict enforcement
of tax laws are important aspects against unethical practice of tax evasion. This can be done
by the promotion of greater ethical standards in schools, homes and workplaces.
Incentive-based plans such as recognition for ethical practices can be implemented to
encourage and reward ethical behaviour which may lead to adherence to ethical practices by
others. It may be argued that the role that religion plays in emerging economies can promote
the practice of ethical behaviour.
 JFRA Surprisingly, our study does not find support for subjective norms, which is consistent with
15,1 prior literature such as Bobek and Hatfield (2003) and Cullis and Lewis (1997). Perhaps,
respondents do not believe that they need to engage in tax evasion based on social influences.
Rather, perceived behavioural control and moral obligation may overshadow all other
considerations.
The study however has several limitations. Of note, given the sensitive nature of taxes and
18 potential incriminating information that could be uncovered, the study measures intentions
rather than actual behaviour. Future research should consider measuring actual tax evasion
behaviour. Our sample differs slightly with respect to age categories, with just over half of the
respondents being under 29 years, compared to the mean age of 41 years for taxpayers as
reported in prior studies in Barbados (e.g. Moore, 2008). Hence, this marked difference in the age
distribution may indicate the existence of a possible limitation in our study. Nevertheless, our
youthful sample represents the future workforce, which may have implications for future revenue
collection by the tax authorities. In addition, a more robust qualitative methodology, using a
wider group of stakeholders could be adopted to delve more deeply into the opinions and feelings
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about the topic under study. This approach could also help to unearth differences in the
perceptions and opinions of the existing dominant societal structures historically used to
maintain power relations between the tax collector and the taxpayer. Future work should also
consider using moral intensity and some variation of scenarios to determine the sensitivity of
these predictors on the intention to engage in tax evasion. Finally, the study did not measure
social desirability bias. As this study used self-report data, the possibility exists “that such
reports may be biased by tendencies to furnish socially desirable responses and to deny holding
socially undesirable attitudes or performing socially undesirable behaviour” (Beck and Ajzen,
1991, p. 291). Future research should control for social desirability bias.

Notes
1. At the time of writing, there has been a leak termed “the Panama Papers”, which highlights a global
web of tax evasion, avoidance and corruption. The Panamanian law firm, Mossack Fonseca, is
under investigation for its role in setting up shell companies and assisting in protecting the identity
of tax dodgers including well-known global politicians (Guardian News and Media Limited, 2016).
2. Tables I-VI provide the scales used in the questionnaire. Negatively worded items were reverse
scored in the data analysis phase. We also recoded the responses (ranging from 1 to 7) such that
high scores in the tables indicate high levels of the specific variables.
3. The income figures stated in this paper are in Barbados dollars (BDS$). The currency exchange rate
is fixed at US$1 ⫽ BDS$2.
4. Petrocelli (2003, p. 11) argues that “in hierarchical regression, the focus is on the change in
predictability associated with predictor variables entered later in the analysis over and above that
contributed by predictor variables entered earlier in the analysis”. Thus, in this current research, we
control for demographics in Step 1 and enter the predictors in Step 2 of our analysis.
5. The literature suggests that multicollinearity exists when correlation coefficients between
variables exceed 0.7 (Cohen et al., 2003; Alleyne and Phillips, 2011). An analysis of the Pearson
correlation coefficients in Table VII indicates the absence of multicollinearity. Variance inflation
factors in our study are below 2, which is further evidence that multicollinearity is not a major
concern.
6. To determine the sensitivity of the results to the income groupings, we form two groups: 1 ⫽ income
levels of $50,000 and under (n ⫽ 97), and 2 ⫽ income levels greater than $50,000 (n ⫽ 53).
7. Thematic analysis is done on the two open-ended questions in the survey instrument. These two
questions asked respondents to state the factors that would encourage and discourage them from
engaging in tax evasion.
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World Bank Group (2016), World Development Indicators Database, World Bank, Washington, DC.

Corresponding author
Philmore Alleyne can be contacted at: philmore.alleyne@cavehill.uwi.edu

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