The influence of tax fairness dimension on tax compliance: evidence from Yemen

Governments around the world continuously attempt to improve the level of tax compliance especially those in countries which face a low level of tax compliance. Yemen is one of these countries in which the level of tax noncompliance has been reported to be at a high level during the last few decades. This study empirically investigates the influence of perception of tax fairness dimensions such as general
fairness, tax rate, benefit from government, attitude towards taxes of the wealthy and self-interest in the government, on individual taxpayer’s compliance behaviour in Yemen. This study is underpinned and supported by the equity theory. The data, which
were collected through survey questionnaires, were analysed using multiple regression analysis and other statistical techniques. A total of 400 questionnaires were distributed that yielded 242 usable questionnaires. The results reveal that there is a positively significant relationship between general fairness, tax rate, benefit from government, self-interest and tax compliance, whereas the relationship between attitude towards taxes of the wealthy and tax compliance is insignificant. This study concludes with the theoretical implications and practical recommendations for the Yemeni Government in order to improve tax collection such as to develop and implement more fairness polices and strategies to maximize tax compliance by improve the system in terms of tax fairness. In addition, the Yemen Tax Authority should play a more proactive role to encourage and educate individual taxpayers by enhancing their knowledge on taxation. This study also highlights several limitations and suggests future studies that can be conducted in this area.