Factors Affecting Tax Attitudes and Tax Compliance: A Survey Study in Yemen

Abstract

  This study was aimed to bring an insight about influence of attitudes and considerations of individual taxpayers on tax compliance in Yemen taking internal and external factors into consideration. The study was conducted in Sana’a, the capital city of Yemen to evaluate and rank the factors that reduce taxpayer compliance. A questionnaire was designed using a five point Likert scale and distributed to tax payers in order to learn their opinions. The results indicated that, high tax rates and unfair tax system are the two most crucial factors associated with low compliance. Furthermore, insufficient tax auditing, little deterrent effects of tax penalties and tax amnesties enacted frequently have impact on taxpayers’ compliance decision.  The factors like insufficient tax office staff number and frequent tax code changes affect tax compliance to a lesser extent.It was also revealed that collected taxes did not return as public goods and services in Yemen. When the responses are compared by gender and age, females were found to be more compliant compared to males to taxation whereas age is not a significant factor in general, especially for external factors. Older group was found to be more compliant compared to young in terms of factors having significant difference. Keywords: tax, tax compliance, tax payer, internal factors, external factors