<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Background:</bold> A lower tax morality leads to an increased readiness to become active in the unofficial economy and causes the lack of public revenues.<bold>Objectives:</bold> The aim of this paper is to investigate determinants that shape tax morale of Croatian citizens.<bold>Methods/Approach:</bold> An ordered logit model is employed to evaluate which determinants shape tax morale of Croatian citizens. Data for the research were collected from 2,000 face-to-face interviews conducted in Croatia in late 2015.<bold>Results:</bold> The descriptive analysis illustrates that 52 percent of respondents reported a high level of tax morale, 26 percent of respondents have a low tax morale, while 8 and 14 percent have a mid-low and a mid-high tax morale, respectively. The ordered logit analysis revealed that gender, age, financial situation, region, and participation in the unofficial economy have an impact on the tax morale.<bold>Conclusions:</bold> Besides socio-demographic, socio-economic, and spatial determinants, a great number of sanctions for participation in informal activities also shapes tax morale of the Croatian citizens. More precisely, marginal effects show that those perceiving the expected sanctions as “normal tax or social security contributions due, plus a fine or a prison sentence” have by 6.3 percentage points higher probability of reporting the highest tax morale than others.</abstract>

Background: A lower tax morality leads to an increased readiness to become active in the unofficial economy and causes the lack of public revenues.Objectives: The aim of this paper is to investigate determinants that shape tax morale of Croatian citizens.Methods/Approach: An ordered logit model is employed to evaluate which determinants shape tax morale of Croatian citizens. Data for the research were collected from 2,000 face-to-face interviews conducted in Croatia in late 2015.Results: The descriptive analysis illustrates that 52 percent of respondents reported a high level of tax morale, 26 percent of respondents have a low tax morale, while 8 and 14 percent have a mid-low and a mid-high tax morale, respectively. The ordered logit analysis revealed that gender, age, financial situation, region, and participation in the unofficial economy have an impact on the tax morale.Conclusions: Besides socio-demographic, socio-economic, and spatial determinants, a great number of sanctions for participation in informal activities also shapes tax morale of the Croatian citizens. More precisely, marginal effects show that those perceiving the expected sanctions as “normal tax or social security contributions due, plus a fine or a prison sentence” have by 6.3 percentage points higher probability of reporting the highest tax morale than others.

Determinants of Tax Morale in Croatia: an Ordered Logit Model

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Determinants of Tax Morale in Croatia: an Ordered Logit Model"}

Background: A lower tax morality leads to an increased readiness to become active in the unofficial economy and causes the lack of public revenues.Objectives:...

Determinants of Tax Morale in Croatia: an Ordered Logit Model

Published Online: Sep 16, 2019

Page range: 37 - 48

Received: Jun 04, 2018

Accepted: Jan 03, 2019

DOI: https://doi.org/10.2478/bsrj-2019-016

Keywords
Croatia, ordered logit model, tax evasion, tax morale

© 2019 Predrag Bejaković et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Determinants of Tax Morale in Croatia: an Ordered Logit Model

Published Online: Sep 16, 2019

Page range: 37 - 48

Received: Jun 04, 2018

Accepted: Jan 03, 2019

DOI: https://doi.org/10.2478/bsrj-2019-016

KeywordsCroatia, ordered logit model, tax evasion, tax morale

© 2019 Predrag Bejaković et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Croatia, ordered logit model, tax evasion, tax morale