Theory of Planned Behavior

147 human behavior Ajzen, 1991. The TPB model depicts that behavioral intention is the immediate determinant of the actual behavior. Behavioral intention is, in turn, determined by attitude towards behavior, subjective norm and perceived behavioral control. Some examples that have successfully applied TPB in predicting behaviors include speeding Paris Broucke, 2008, adolescent smoking Guo et al., 2007 and cardiopulmonary resuscitation CPR involvement Dwyer Williams, 2002. In a taxation context, Bobek 1997 applied the TPB model with the inclusion of the moral obligation variable.

3.5.1 Attitude towards compliance

Ajzen 1991 stipulates that attitude towards compliance reflects feelings of favor and disfavor towards compliance behavior. The contention has been shown by Davis et al. 1989 in information technology studies. In a taxation context, Bobek 1997 found that attitude explains compliance behavior when the belief-based attitude measure is used. A recent study by Loo et al. 2007 also emphasizes that attitude towards the tax system positively influences the compliance behavior. Thus, it is anticipated in this study, that a positive attitude towards the tax system would encourage taxpayers to comply and vice versa.

3.5.2 Subjective norm

Subjective norm reflects motivation to conform with significant referents either to comply or not comply with tax obligations. A review of factors affecting compliance from 1986 to 1997 reveals compliance with peers as significantly related to compliance behavior Richardson Sawyer, 2001. This view is supported by Bobek 1997 who found that subjective norm significantly affects compliance 148 behavior in a business deduction scenario. A comparative study in Australia, Singapore and the US by Bobek et al. 2007 also found subjective norm as an influential factor in explaining tax compliance behavior. Based on the literature, I expect subjective norm would positively influence taxpayers in their compliance decisions.

3.5.3 Perceived behavioral control

Perceived behavioral control reflects an individual‘s perception on the ease or difficulty in performing a particular behavior. Azjen 1985 stipulates that a behavior that is easy to perform is high in perceived behavioral control, while one that is difficult to perform is low in perceived behavioral control. Furthermore, the author suggests that an individual with high perceived behavioral control will be more likely to perform the behavior in context than an individual with lower perceived behavioral control. In tax compliance behavior research, when a taxpayer believes that he or she can successfully complete and file the tax return forms with Inland Revenue without any mistakes, the person seems to have a high perceived behavioral control and is more likely to comply with their tax obligations. Likewise, if a taxpayer believes that he or she can avoid paying tax without being caught by a tax audit, the person also seems to have a high perceived behavioral control over non-complying, and thus, is more likely to avoid paying tax. In this study, I am interested in respondents‘ perceived behavioral control over non- complying with tax obligations. In particular, I anticipate that the higher the perceived 149 behavioral control, the more likely that the taxpayers would avoid compliance. Based on the foregoing discussion on the TPB, it is therefore hypothesised that: H 5a : Attitude towards compliance and subjective norm positively influence tax compliance behavior of New Zealand taxpayers; and H 5b : Perceived behavioral control negatively influences tax compliance behavior of New Zealand taxpayers. As indicated earlier, perceived behavioral control deals with how taxpayers perceive relative easiness and difficulty in non-complying with tax obligations. As taxation is inherently a complicated matter, it is more likely that taxpayer‘s control over non- complying with tax obligations is influenced by resources and obstacles. Based on this argument, it is appropriate to investigate the impact of tax knowledge resources and tax complexity obstacles on perceived behavioral control. Therefore, it is hypothesised that: H 6a : Tax knowledge positively influences perceived behavioral control of New Zealand taxpayers. H 6b : Tax complexity negatively influences perceived behavioral control of New Zealand taxpayers.

4. Proposed Model

I now propose a model, as set out in Figure 2, that incorporates the factors that may influence fairness perceptions and compliance behaviour as discussed earlier. A description of each construct employed in the model is also presented. 150 FIGURE 2 Factors Affecting Fairness Perceptions and Compliance Behavior

5. Methodology

This section outlines the data collection and sampling characteristics, measurement techniques, demographic information and data analysis.

5.1 Data collection and Sampling

Data were collected through a postal survey. A total of 2,267 questionnaires were mailed to taxpayers. The questionnaire included a total of 85 items, including items not included in the analysis within this study. Since there is no identifying coding on the questionnaire, a reminder was mailed to all of those in the first mail out to increase the response rate. A total of 229 usable responses were received for a Attitude towards compliance Subjective Norms Intention to comply Tax knowledge Tax complexity Compliance behavior Fairness perception Perceived Behavioral Control