Association between tax morale and the perceptions around tax compliance: an empirical study for Latin America

Abstract Tax morale depends on many factors, including the perception of fairness and trust in the tax system. In this sense, it is reasonable to think that individuals’ perceived tax compliance influences their willingness to pay taxes. Consequently, this paper addresses such a hypothesis, as similar empirical works have failed to prove this by focusing on broader concepts such as trust in others and trust in the neighborhood. To do this, we considered the opinions of a sample of Latin American citizens using the data from the 2009, 2010, and 2011 Latinobarometer waves, which include questions about the perceived level of tax compliance of others. Our findings suggest inter alia that citizens living in societies where tax evasion is considered widespread are more likely to justify tax evasion, even controlling for potential endogeneity problems.