FACTORS INFLUENCING ON INCOME TAXPAYERS’ COMPLIANCE BEHAVIOR: SPECIAL REFERENCE TO KANDY DISTRICT, SRI LANKA

Abstract

This study attempted to reveal the factors influencing income taxpayers’ compliance behavior of Kandy District income taxpayers. The main objective of the study is to find out impact of taxpayers’ perception of tax fairness on income tax payers’ compliance behavior. The study used a cross-sectional survey method of research design. Given the scale ranking information of the dependent variable, income tax payer’s compliance behavior was influenced by the perception of tax fairness. The study results from the survey conducted in Kandy district using 100 respondents, indicate that income taxpayers’ compliance behavior influenced by exchange with government, special provision and tax rate structure. The result of this study can inform the government how the determinants influence tax income taxpayers’ compliance behavior. The analysis focuses on tax compliance and its determinants and is therefore subject to an underlying assumption of taxpayers’ understanding of income tax and other potentially relevant information. The result of this study also provides specific insights and allows the government to gain a benefit understanding of the variables that are significantly associated with tax compliance and enable them to implement suitable strategies to minimize potentially damaging factors and should also allow them to improve the government’s tax revenue collections. In Sri Lanka, tax collection is evidenced to be low. The findings of the study indicated that the taxpayers' perception of tax fairness has moderately influence income taxpayers' compliance behavior. Hence, studying the factors influencing tax compliance is of enormous significance.