The Maltese fiscal authority : the perspective of individual taxpayers

Abstract

PURPOSE: This study evaluates four different perceptions of individual taxpayers with respect to the Maltese fiscal authority. These perceptions include, service orientation, power, trust and fairness. Furthermore, this research examines factors, including family/friends’ experience and perceptions, personal experience, and media reports which influence individuals’ perceptions. Lastly, an investigation on the relationship between the different perceptions and tax compliance is made. DESIGN: A quantitative research methodology was used to collect primary data. Where an online self-completed questionnaire was distributed to Maltese individual taxpayers which are resident and domiciled in Malta, over 18 years old. FINDINGS: The majority of participants, on average rated positively the four perceptions examined. However, low mean rating scores (below 3.00) were provided to the following three aspects: CfR detects anyone who intentionally does not declare all his income (power); CfR applies penalties and sanctions equally to all clients (fairness); and CfR treats everyone fairly and follow fair procedures to assist its clients (fairness). Moreover, findings indicate that the most influencing factor on individuals’ perceptions is their experience with the authority. Finally, findings illustrate that a positive relationship exists between each perception and tax compliance. From which several relationships resulted to be statistically significant. CONCLUSIONS: Although perceived service orientation on the fiscal authority is a positive one, services and communication channels should be continuously improved. This enhances taxpayers’ experience with the authority, which resulted as the most influencing factor on participants’ perceptions. Additionally, remaining perceptions still require improvements, since the better the perceptions are, the greater the impact is on tax compliance due to the positive relationships found. VALUE: The authority, may benefit by focusing on the weakest perceptions. Improving individuals’ perceptions of the Maltese fiscal authority, can lead to a better relationship and enhanced communication with taxpayers. Consequently, tax compliance may be increased, thereby tax evasion may be reduced.