Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence
ISSN: 1450-2194
Article publication date: 27 October 2020
Issue publication date: 13 October 2021
Abstract
Purpose
The purpose of this study is to better understand the issues on tax compliance. This study aims to examine the influence of patriotism and public governance on the sales tax compliance of small and medium enterprises (SMEs) and to examine the interaction between patriotism and public governance on sales tax compliance.
Design/methodology/approach
This study was carried out by soliciting the opinions of owner-managers of SMEs in Jordan through a survey that was distributed by self-administered. This paper uses partial least squares structural equation modelling to investigate the influence of patriotism, public governance and the interaction of these two mechanisms on sales tax compliance for a sample of 385 SMEs.
Findings
This paper finds that patriotism and the public governance increase and improve the level of sales tax compliance. The findings also supported the interaction effect of patriotism on the relationship between public governance with sales tax compliance. Thus, all the hypothesised relationships were supported.
Practical implications
Tax authorities and policymakers in developing majority societies in developing countries and in other Arab countries, especially in Jordan, may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen the compliance of eligible SMEs to further boost their sales collections.
Originality/value
Very few studies have examined the determinants of sales tax compliance, and there has been an absence of work that examines the influence of the patriotism and public governance on sales tax compliance. This paper, therefore, fills a gap in the literature by providing the first empirical evidence about the influence of patriotism and public governance on sales tax compliance of SMEs in developing countries. This study is the initial paper to examine the interaction between patriotism and public governance on sales tax compliance among SMEs in developing countries
Keywords
Acknowledgements
The authors declare no potential conflicts of interest. The authors would like to thank the editorial team for their help and support throughout the publication process. The authors are also grateful for the constructive feedback and advice supplied by the two anonymous referees.
Citation
Alshira'h, A.F., Al-Shatnawi, H.M., Al-Okaily, M., Lutfi, A. and Alshirah, M.H. (2021), "Do public governance and patriotism matter? Sales tax compliance among small and medium enterprises in developing countries: Jordanian evidence", EuroMed Journal of Business, Vol. 16 No. 4, pp. 431-455. https://doi.org/10.1108/EMJB-01-2020-0004
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited