Journal of Exclusive Management Science – April 2018 - Vol 7 Issue 04 – ISSN 2277-5684

Tax Perception and Compliance Behavior in Nekemte Town

TemesgenAndualemKassahun
YilakAlamrewFenite
MisganuGetahunWedajo

College of Business and Economics, University of Gondar, Gondar, Ethiopia

College of Business and Economics, Wollega University, Wollega, Ethiopia
Abstract
It is a widely accepted agreement that, government expenditure is a necessary condition for a country to
grow and develop. Taxes are the main sources government use to achieve its legitimate projected
revenue to finance the country‟s expenditure. Cognizant of this fact, taxpayers‟ perceptions regarding
tax and the benefit it gives for the society's influence government's ability to collect the required amount
of money, which can be used as an engine for running the wellbeing of the society. Thus, this study
tries to examine how business taxpayers perceive the tax system in Nekemte City, and how their
perception influences their tax compliance behavior. To this end, data were collected through
questionnaire from 234 sample respondents. To measure their tax perception, mean and standard
deviation were used while ordinal logistic regression was employed to ascertain whether factors of tax
perception influence tax compliance behavior or not. The result revealed that business taxpayers in
Nekemte City believe taxes are important for the nation‟s development, although they feel that city
administrators and tax office of the city don‟t communicate properly, how the taxes collected spend in
the way it benefit the residents of the city. Moreover, factors of economic deterrence, social influence,
and fiscal exchange influence the probability of tax compliance.
Key Words: - Tax Perception, Economic Deterrence, Fiscal Exchange, Comparative Treatment, Social
Influence, Political Legitimacy
Introduction and Justification for the Study
Tax can be defined as “money that you have to pay to the government so that it can pay for public
services” Oxford advanced learner's dictionary. The importance of taxes comes from the importance of
government expenditures as the ultimate objective of any government; tax system is to achieve its
legitimate projected revenue to finance country‟s expenditure. This provision of public services and
infrastructure is a key factor for economic development and growth (Ibn Khaldun as cited by Islahi,
2006).
As per the IMF report the Ethiopian government is implementing a public sector-led development
strategy centered on high public investment, which calls for substantial external financing and state
mobilization of domestic resources, has provided an important drive for growth. Combined with pro-
poor spendingithat has averaged more than 12 percent of GDP over the past decade, this has helped to
achieve a robust real GDP growth estimated 7 percent in 2012/13 and projected to increase to 7.5
percent in 2013/14 and 2014/15 (IMF, October 2013). The report also states that the government has
been successful in translating economic growth in higher living standards and reduces unemployment
for its citizens and has outperformed many sub-Saharan African countries and a number of non-
African countries. However, following the worldwide money crisis the amount of donation, donors
provides for developing countries reduced dramatically (Fjeldstad, 2013). The IMF report also shows
that in the first two years (2010/11–2011/12) of the GTP the required external financing was not
materialized. This reflects a concern for domestic revenue mobilization to finance public sector-led
development strategy, as well as recognition of the centrality of taxation for growth.
Even though, the amount of revenue collection is increasing dramatically from 54 billion in 2009/2010
to 103 billion in 2011/12 and estimated to reach 248 billion in 2017/18, income taxes averaged 3.7
percent of GDP in the same period against the regional competitors‟ average of 4.8 percent of GDP,
which are considered more progressive than indirect taxes. On the other hand, domestic taxes on goods
and services stand only at 2.4 percent of GDP as opposed to 7.2 percent of GDP for regional
competitors‟ average (IMF, October 2013). Currently revenue-to-GDP ratio is 13.2%, which is below sub-
Saharan African average of 18%. Moreover, tax collection in Ethiopia suffers numerous problems, such
as poor tax knowledge, rent-seeking behavior, and lack of good governance, etc. (YemidiyaDasesa,
February 13 2014).
Considering the reduction in donation and grants, and the need to raise more revenue from domestic
sources to continue the growth and achieve the GTP and MDG goals, the need to assess the way to
generate more revenue is necessary. Scholars in the area advising governments that a high tax rate is
not a guarantee for maximum tax revenues rather it can cause diminished revenue after a certain stage
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by discourage work efforts, encourage tax avoidance and even tax evasion. So what governments can do
in order to increase tax revenue is understanding taxpayers‟ behavior: which requires understanding of
the taxpayers‟ attitudes and the economic and behavioral determinants of tax compliance. Scholars use
five interrelated views about taxation, and these are: economic deterrence, fiscal exchange, social
influences, comparative treatment, and political accountability. In general, the following issues have
been addressed in our study.
 How do taxpayers perceive the likelihood of being detected and punished if evading tax?
 Do taxpayers‟ attitudes towards taxation depend on their perceptions about the state‟s delivery of
public goods and services?
 Are taxpayers‟ tax behavior influenced by their perception of others‟ behavior?
 How do taxpayers perceive they are treated by the tax administration relative to other people in their
community?
 Is there a relationship between taxpayers‟ perceptions of tax authority‟s accountability and attitudes
towards taxation?
Objective of the Study
Following are the objectives of the study
 Determine business taxpayers‟ tax perception
 Determine the extent to which business taxpayers comply with the tax system.
 Determine the degree to which each of the study variables influences taxpayers‟ tax compliance
behavior.
Review of Related Literatures
What is Tax: The term tax derived from the latin word “taxo” refers to charges imposed by a state or its
functional equivalent upon a taxpayer to generate fund for various public expenditures. It is hard to
come up with a single and pricise definition of tax, the following are possible definations. As per
Selingman, (1895) tax is „a contribution from individuals out of their private property for the
maintenance and defense of government, so that government may perform its functions and the ends of
the state be realized‟. The Oxford Advanced Learner's Dictionary describe it as „a compulsory
contribution to state revenue, levied by the government on workers' income and business profits, or
added to the cost of some goods, services, and transactions‟. Taylor, (1968) define as as „compulsory
payment to government without expectation of direct return or benefit to taxpayers‟. These definations
tells us, tax necessarily imposed by government through laws and/ or regulations and enforced through
penalties and interests for defaults or late payments; and it takes various forms (such as; income tax,
corporate tax, e.t.c) collected either directly or indirectly. Moreover the taxpayer who pays taxes may not
expect direct personal benefit from the government in a return of his/her tax contribution.
Tax compliance: The Internal Revenue Service (IRS) USA, (2009) defines tax compliance as “the ability
and willingness of taxpayers to comply with tax laws, declare the correct income in each year and pays
the right amount of taxes on time”. In the meantime the question of whether „compliance‟ refers to
voluntary or compulsory behavior is an issue (James & Alley, 2004). Advocators of voluntary tax
compliance like James & Alley, (2004) argue that, the purpose of raising tax is for the public benefit,
therefore it advantageous if compliance is voluntarily and on time. In contrary, scholars such as Feld et
al. (2006) believed that tax compliance is compulsory, by stating the availability of enforcement from tax
authority in case of failure to comply with the rules and late payments. Desta, (2010) defined tax
compliance as “the degree to which taxpayers comply with the tax law” which supports Mc Barnet‟s
(2001) three forms of tax compliance; committed compliance, capitulative compliance and creative
compliance.
Factors Affecting Tax Compliance: This study identified six set of factors which influence tax
compliance such as; economic deterrence, fiscal exchange, social influences, comparative treatment,
political accountability and decomography.
Economic Deterrence is the oldest thought discovered by Becker in the late 1960s. Under economic
deterrence, the decision to comply is based on a cost-benefit analysis in which people rationally weight
the benefits of non-compliance against the probability of detection and penalties for fraud, which
determine the costs (Fjeldstad, et.al, 2012; Milliron and Toy (1988) cited by Devos, (2014). Deterence
may be punitive and persuasive which involves either increasing the probability of detection, increasing
the tax rate and imposing a tougher penalties; or better education, increased publicity and incentives
(Devos, 2014). Results are mixed, Fjeldstad, et.al, (2012); Chau and Leung, (2009) stated that if

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detection is likely and penalties are severe more people will comply with taxes. However Allingham and
Sandmo‟s (1972) stated that certainty of being detected and severity of punishments can be used
interchangeably; while Friedland, et.al, (1978) found that large fines tend to be more effective deterrents
than frequent audits.
According to fiscal exchange theory compliance increases with taxpayers perceptions of the availability
of public goods and services Alm et al. (1992). Nicolaides, (2014) also discussed taxpayers expect some
public goods and services in exchange for their tax contribution. Fjeldstad, et al., (2012) stated that
those public goods and services provided must be valuable for the taxpayers to serve as a motivating
factor for taxpayer compliance. Palil, et al. (2011); Ali, et.al, (2013) found that satisfaction with the
provisions of public goods and services will result more willing tax contributors, while dissatisfaction
cause reducing compliance. Yet, which specific public service provision (i.e roads, electricity, education,
health, ....) motivates citizens for tax compliance differe from country to country (Ali, et.al, 2013).
According to Comparative treatment or Equity theory, tax compliance can be influenced by individuals‟
perception of the fairness of the system that determines the tax rules and tax duties (McKerchar and
Evans, 2009). The study conducted by Ali, et.al, (2013) also shows that in South Africa and Tanzania
tax compliant behavior affected by taxpayer‟s perception of how their ethnic group is treated by the
government. Jackson and Milliron (1986) cited by Chau and Leung, (2009) describe tax fairness with
two dimensions. Which reflected by taxpayers‟ perceptions that they get public goods and services that
can be justified by their tax contribution or in relation to what other taxpayers pay. Those taxpayers
who believe the tax system is fair are more likely to comply with tax.
Snavely (1990) and Cevik, (2014) found that social interactions influence human behavior. As stated by
Fjeldstad, et al., (2012), if a taxpayer knows many people important to him who comply with the taxes,
his/her commitment to comply will be higher. Yankelovich et al. (1984) also reported that, those who
report compliance believe that their peers and friends comply, whereas those who report cheating
believe that others cheat. Chan et al. (2000) also reveals that taxpayers may still commit noncompliance
so long as this noncompliance is consistent with in-group expectations and norms. It indicates that
perceptions about the honesty of others may affect compliance behavior.
Political legitimacy refers to perceptions about the governments and tax authority trustworthiness
(Kirchler et al. 2008). Higher legitimacy for political institutions leads to higher tax compliance (Torgler
and Schneider 2007). The finding by Masuda, et.al, (2014) and Wilks and Pacheco, (2012) shows that
trust in authorities and their capacity to deter and punish tax evaders are interrelated. Moreover, Wilks
and Pacheco, (2012) stated that trust is essential. Trust in government is highly influenced by
perceptions of corruption. As a result corruption must be addressed as a condition. In a country where
citizens believed that bribery and the abuse of power for personal gain were widespread amongst
national politicians and corruption is the serious concern in the country, securing targeted tax revenue
will be impossible, since perception of corruption-eroded compliance. Picur and Riahi-Belkaoui (2006)
find that tax compliance is highest in countries characterized by high control of corruption and low size
of bureaucracy.
Studies also shows that, demographic characteristics of the respondents (such as age, gender, marital
status, education, employment, tax status, income level, etc.) have an impact on citizens‟ tax perception
and compliance behavior (Walsh, 2012; Tittle, 1980; Torgler, 2003; Chan, et.al, 2000 as cited by Palil &
Akir, 2013)
Methodology
The study is descriptive in nature since it measures the extent of tax perception and behavior; of
courseit answers why people comply with tax thus we can say that it is also causal. The study was
conducted on 263 respondents‟ being selected from 3149 business taxpayers in Nekemte Town (as of
October 2014, there were 570 category A, 280 category B, and 2341 category C tax payers in Nekemte
as per the data taken from Ethiopian Revenue and Customs authority, Nekemte) through convenience
sampling technique using Cochran (1977) formula as cited in (Bartlett, et al., 2001).
To meet the research objectives, a cross sectional survey has been carried out and particularly it was
questionnaire being used to collect data from respondents. The items for the instrument were adapted
from Afrobarometer Round 5 (2012) instruments which is considered as a more comprehensive
empirical analysis of taxation theory in African societies. We were used enumerators with excellent
Amharic and Afan Oromo language proficiency and our pilot test shows a Cronbach‟s alpha score which
makes the instrument more reliable. The collected data were analyzed through descriptive statistics (i.e
frequency, percentage, mean, and standard deviation) and of course Ordinal logistic regression was
used to determine why business owners pay taxes.
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Measurement
Asking taxpayers directly whether they refuse to pay taxes that they owed to the government during the
last years so as to measure their tax compliance attitude and behavior is not the proper way, since
individuals tend to answer untruthfully when asked questions about sensitive issues. Tax compliance
attitude in Afro barometric round five instruments (the measure from which we adopted the instrument)
use an indirectly phrased question to capture tax compliance attitude in order to avoid direct
implication of “wrongdoing” by the respondent. The instrument ask respondents to state whether they
think it is “not wrong at all”, “wrong, but understandable” or “wrong and punishable” for people not to
pay taxes on their income. Based on these responses, individuals were considered as having a tax
compliant attitude if their response is “wrong and punishable‟‟ and non-compliant attitude if their
response is either “not wrong at all” or “wrong, but understandable”. Such a measure was believed the
best way of dealing with behavioral issues Reinikka and Svensson (2006); Hug and Spörri (2011),
Torgler (2004; 2005) and Daude and Melguizo (2010) (Ali, et.al 2013). Beside the ordinal logistic
regression model were applied to determine the probability of being tax compliant as predicted by the
study variables.
𝑃𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑜𝑓 𝑇𝑎𝑥 𝐶𝑜𝑚𝑝𝑙𝑖𝑎𝑛𝑐𝑒 = 𝛼𝑜 + 𝛽1 𝐸𝑐𝑜𝐷𝑒𝑡 + 𝛽2 𝐹𝑖𝑠𝐸𝑥 + 𝛽3 𝑆𝑜𝑐𝐼𝑛𝑓 + 𝛽4 𝐶𝑜𝑚𝑇𝑟𝑒 + 𝛽5 𝑃𝑜𝑙𝐴𝑐𝑐 + 𝜀
Where:
EcoDet = Economic Deterrence
FisEx = Fiscal Exchange
SocInf = Social Influence
ComTre = Comparative Treatment
PolAcc= Political Accountability
ε = error term
Results and Discussions
Participants were business taxpayers in Nekemte City. 263 questionnaire were distributed ofwhich 234
were found complete and useable.156 (67%) of the participants were male, they range in age from 18 to
61 (Mean = 33 years). The majority describing themselves as Oromo123 (52.6%) and Guragie54 (23.1%),
with other business tax payers describing themselves as Amhara, Tigrie and others. More than half of
the study respondents are “Category C” taxpayers‟ 55.1%, followed by “Category B” and “Category A”
taxpayers‟ accounts for 21.4%, and 19.7% accordingly. The significant proportion of business taxpayers
have little schooling, 26.9% completed grade 10/12, 16.2 % have some secondary school, 15.8% some
primary those who participated in higher education (either in Colleges or Universities) only 14.1% and
12% have no formal schooling at all.
Affordability problem, high tax rate, unfair tax system and poor public goods and services are what
taxpayers think the main reasons for avoiding tax in NekemteCity. The study conducted by Ali, et.al,
(2013) and Aiko, (2013) also demonstrate high tax rate, unaffordability of the tax charged, and poor
public services are the top three reasons taxpayers stated as major reasons for tax avoidance. To assess
whether business taxpayers understand the role of their tax contributions for the country‟s
development, the researchers raise the issue of “Citizens must pay taxes vs. no need to tax the people
for the country to develop”. The broad majorities (91.55%) say citizens should pay their taxes to
government "for the country to develop" only 8.45% think, government should find resources for
development from other sources.
In the study, respondents are also asked the legitimacy of Ethiopian Revenues and Tax Authority to
collect tax, and how easy it is to find out how government spends taxes and fees collected. The result
shows that 83.34% of the respondents believed that Ethiopian Revenues and Tax Authority have
legitimate right to collecting taxes from people, but the significant proportion (42.3%) of the respondents
find it difficult to find out how those monies are being used government.
Mean, S.D and Correlations among the study variables
Business taxpayers‟ tax compliance behavior in Nekemte city is attractive as the mean result is close to
the positive one which, „not paying tax is wrong and punishable‟. The study also revealed that business
taxpayers have positive tax perception, which tilted to the maximum one. Moreover, the Pearson
correlations coefficient explains that, economic deterrence, social influence, tax knowledge, and non-
state actors‟ have statistically significant correlation with tax compliance behavior (see appendix 1).

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Factors influencing Tax compliance Behavior

Ordinal logistics regressions were used to determine which variable/s among tax perception predict the
probability of tax compliance. Business taxpayers perception for Economic Deterrence (difficulty of
evading tax); Fiscal Exchange (health and education, infrastructure, Basic Service like water, post
office, etc., and crime and conflict); Social Influence (compliance of others); Comparative Treatment (fair
treatment); Political legitimacy(trust and corruption); Non‐ state actors(payments to non‐ state actors)
and Knowledge about taxes(difficulty finding out what taxes to pay) are independent variables, used to
determine to what extent they influence the dependent variable, probability of tax compliance. The
dependent variable which is the probability of tax compliance is taken from the respondents thinking of
whether it is “not wrong at all”, “wrong, but understandable” or “wrong and punishable” for people not
to pay taxes on their income.
The ordinal logistic regression result reviled that the model fit a highly significant reduction in the chi-
square statistics (p<.005), so the model is clearly a significant improvement over the baseline or
intercept only model. The Pseudo R-Square (i.e Nagelkerke = .756) indicates the model can account for
significant variance in business taxpayers‟ probability of tax compliance. Moreover, the goodness of fit
test is not significant, which suggests the model fits the data well. Among the study variables, economic
deterrence (difficulty of evading), social influence (the compliance behavior of others) and fiscal
exchange (perception for infrastructures, such as road and electricity) predict approximately 76% of the
probability of tax compliance at p<.05. The parameter estimates for explanatory variables presented in
appendix 2.
The model confirms a strong association between economic deterrence and probability of tax
compliance at P=0.01 level. We can see significant and negative coefficients for business taxpayers who
perceive it is easy to avoid tax and his/her thinking of „wrong not to pay tax‟. Similar finding was found
by Ali, et.al, (2013). They stated in their work, an increase in the perception of individuals about the
difficulty of evading taxes increases the likelihood of responding “wrong not to pay taxes”. On the other
hand, an increase in difficulty of evasion reduces the likelihood of responding “wrong but
understandable” and “not wrong at all” in all the four countries.
The association between social influence and probability of tax compliance is statistically significant at
P=0.05 level. Business taxpayers‟ who perceive other taxpayers do not pay their tax properly and
his/her thinking for „wrong not to pay tax‟ have statistically significant negative coefficient. Ali, et.al,
(2013) also found that the perception of other people‟s compliance, as a proxy for social influences, is
likely to increase own tax compliance in Tanzania.
The study also shows statistically significant association between probability of tax compliance and
fiscal exchange. A business taxpayer who dissatisfied by governments provision of public goods such as
electricity and road is not likely to respond „wrong not to pay tax‟. Similarly Ali, et.al, (2013) also found
that, in Tanzania and Uganda individuals who are more satisfied with the government‟s provision of
basic health services and addressing educational needs are more likely to respond „wrong not to pay
taxes‟. In Kenya who are more satisfied with government handling of infrastructure such as roads and
electricity are more likely to respond „wrong not to pay taxes‟ and less likely to respond „wrong and
understandable‟ and „not wrong at all‟.
Conclusion
This paper surveys how business taxpayers‟ perceive taxation and identified factors determining their
tax compliance behavior evidence from Nekemte city. Unaffordability of the tax charged, high tax rate,
unfair tax system and poor public goods and services are the top four main reasons taxpayers stated for
avoiding tax.
Business taxpayers in Nekemte city confirm that national development should be built on a base of
domestic taxation, instead of relying solely on other sources of revenue. Furthermore, taxpayers in the
city prefer and even willing to see their taxes increase, as long as this would result in more services
provided by governments. Besides, Ethiopian Revenues and Tax Authority or ERCA enjoying legitimacy
among taxpayers. Also, it is easy to find out how government spends taxes and fees collected, still
significant proportion of the study respondents face difficult to find out how those monies are being
used by city administration.
Among the study factors; economic deterrence (difficulty of evading), social influence (the compliance
behavior of others) and fiscal exchange (perception for infrastructures, such as road and electricity)
influence the probability of tax compliance.

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Appendix 1: Mean, Standard-Deviation and Pearson Correlation

S.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mean Std. D
1 Tax Compliance (3) 2.86 .431 1

2 Political legitimacy
2.79 1.185 -.027 1
Trust (4)
3 Corruption (4) 2.86 .823 .041 .476** 1

4 Knowledge about taxes

2.28 1.122 .027 .105 .124 1
How tax revenue spend (4)
5 Non‐state actors
Payments to non‐state actors 3.64 .773 .193** -.080 -.086 .120 1
(4)
6 Fiscal Exchange
4.01 1.046 .074 .343** .451** .107 -.032 1
Health Education (5)
7 Infrastructure (5) 3.44 1.164 -.031 .313** .481** .320** .000 .471** 1

8 Public Service(5) 3.38 .773 .028 .351** .356** .379** .055 .360** .585** 1

9 Crime Conflict(5) 4.55 .614 -.086 .230** .320** .072 -.075 .410** .311** .365** 1

10 VAT 1.68 .469 .006 .092 -.002 -.004 .18** -.106 -.087 -.045 -.107 1

11 Economic Deterrence
3.41 .836 .557** -.146* -.063 -.116 .029 -.026 -.138* -.095 -.054 .028 1
Difficulty of evading tax (4)
12 Comparative Treatment
3.17 .905 .055 -.120 -.029 .267** .108 -.046 -.005 .225** .091 -.246** .049 1
group unfair treatment (4)
13 Social Influence
3.25 .891 .291** .117 .172* .274** .155* .108 .129 .281** -.025 -.112 .143* .303** 1
Compliance of others (4)
14 Knowledge about taxes
Difficulty finding out what 2.76 1.092 .234** -.056 .057 .217** .007 -.023 .043 .101 -.061 .058 .113 -.053 .077 1
taxes to pay (4)

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Estimate Std. Error Wald df Sig.

Threshold [Notpayingtax = 1] -4.920 1.779 7.648 1 .006
[Notpayingtax = 2] -3.289 1.731 3.610 1 .057
Location [CrimeConflict=3] -.027 1.401 .000 1 .985
[CrimeConflict=4] -.208 .829 .063 1 .802
[CrimeConflict=5] 0a . . 0 .
[Trust=1] 1.193 1.322 .815 1 .367
[Trust=2] 1.014 1.330 .582 1 .446
[Trust=3] -.735 1.130 .423 1 .515
[Trust=4] 0a . . 0 .
[Corruption=1] .463 1.389 .111 1 .739
[Corruption=2] .233 1.302 .032 1 .858
[Corruption=3] .917 1.119 .672 1 .412
[Corruption=4] 0a . . 0 .
[Nonstateactors=1] -.426 2.068 .042 1 .837
[Nonstateactors=2] 2.603 1.803 2.084 1 .149
[Nonstateactors=3] -1.079 1.181 .836 1 .361
[Nonstateactors=4] 0a . . 0 .
[HealthEducation=1] 3.160 1.891 2.794 1 .095
[HealthEducation=2] 3.019 4.027 .562 1 .453
[HealthEducation=3] -1.386 1.195 1.346 1 .246
[HealthEducation=4] .502 .769 .427 1 .513
[HealthEducation=5] 0a . . 0 .
[Infrastructure=1] -3.862 1.810 4.553 1 .033
[Infrastructure=2] .779 1.616 .232 1 .630
[Infrastructure=3] .491 1.190 .170 1 .680
[Infrastructure=4] -.546 .991 .303 1 .582
[Infrastructure=5] 0a . . 0 .
[PublicService=2] -.683 1.999 .117 1 .733
[PublicService=3] .401 1.643 .060 1 .807
[PublicService=4] -.843 1.406 .359 1 .549
[PublicService=5] 0a . . 0 .
[VATonpurch=1] -.609 .718 .720 1 .396
[VATonpurch=2] 0a . . 0 .
[Taxavoidance=1] -3.440 .895 14.763 1 .000
[Taxavoidance=2] -2.486 .903 7.580 1 .006
[Taxavoidance=3] .630 .757 .691 1 .406
[Taxavoidance=4] 0a . . 0 .
[Fairtreatmentoungroup= -1.212 1.261 .924 1 .336
1]
[Fairtreatmentoungroup= -1.062 .958 1.229 1 .268
2]
[Fairtreatmentoungroup= .104 .899 .013 1 .908
3]
[Fairtreatmentoungroup= 0a . . 0 .
4]
[Otherstaxbeha=1] -2.374 .922 6.624 1 .010
[Otherstaxbeha=2] -1.440 .930 2.399 1 .121
[Otherstaxbeha=3] .412 1.125 .134 1 .714
[Otherstaxbeha=4] 0a . . 0 .
[Taxknowledge=1] -.565 .853 .439 1 .508
[Taxknowledge=2] -.790 1.190 .440 1 .507
[Taxknowledge=3] -.016 .939 .000 1 .987
[Taxknowledge=4] 0a . . 0 .
[Knowgovtsp=1] -1.327 1.085 1.496 1 .221
[Knowgovtsp=2] .187 1.238 .023 1 .880
[Knowgovtsp=3] -.512 1.249 .168 1 .682
[Knowgovtsp=4] 0a . . 0 .
Link function: Complementary Log-log.

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 Journal of Exclusive Management Science – April 2018 - Vol 7 Issue 04 – ISSN 2277-5684

Appendix 2. Parameter estimate

Model Fitting Information

-2 Log Chi- Goodness-of-Fit

Model Likelihood Square df Sig.
Chi-
Intercept Square df Sig.
174.119
Only
Pearson .a 150 .
Final 60.228 113.891 38 .000
Devianc a
. 150 .
Link function: Complementary Log- e
log.
Link function: Complementary Log-
log.
Pseudo R-Square a. Floating point overflow occurred
while computing this statistic. Its
Cox and Snell .469 value is therefore set to system
Nagelkerke .756 missing.

McFadden .654

Link function:
Complementary Log-
log.

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