Motivations for tax compliance: the case of small business taxpayers in New Zealand

This study investigates small business taxpayers' psychological and social disposition towards taxation based on the motivational postures framework. Our findings show that small business taxpayers can adopt more than one posture towards taxpaying. Sometimes they cooperate and sometimes they defy, depending on the circumstances. In general, the perception of an authority's trustworthiness and fairness helps to close the perceived social distance between taxpayers and the authority. Resistant defiance is about grievance over the way an authority carries out its duties and could be reduced by treating people fairly, fostering trust and improving tax knowledge. Game playing and disengagement postures indicate that people are questioning why an authority exists. This deeper form of defiance is not easily managed. The results support the call for authorities to deal with taxpayers in a fair, respectful and trustworthy manner before deep defiance sets in.