Public Management as Citizen Compliance: A Case Study of Income Tax Compliance Behavior in Thailand

Abstract

This dissertation proposes that in democratic government understanding citizens is a key to effective public management and understanding taxpayers is a key to successful tax administration. Tax compliance has long been a prevalent issue in many countries including Thailand, where a personal income tax gap is at least 200 billion Baht ($6.7 billion) or 10% of the total revenue. The two major purposes of this study are 1) to explore citizens' perceptions of the Thai personal income tax system and the matter of tax compliance and 2) to identify important determinants of tax compliance behavior in Thailand. This study used two research methods: a face-to-face survey of 1,148 citizens in Bangkok and interviews with 15 Thai tax experts. The survey findings suggest that significant determinants of tax compliance behavior in Thailand are: enforcement perceptions, fairness of the tax system perceptions, tax knowledge, and demographic characteristics, which confirm that both the traditional utility maximization and the alternative behavioral approaches are necessary for understanding tax compliance issues. Tax experts' opinions support the survey results. This study recommends a comprehensive package of strategies for increasing tax compliance in Thailand, which includes making tax system more fair via lowering tax rates, broadening tax base, eliminating unnecessary allowances and deductions, linking welfare benefits to tax filing, improving the penalty enforcement, educating citizens about tax duties and the sense of citizenship, and improving government administration and revenue spending in the long run. This study contributes to both academics and practitioners by serving as the first comprehensive tax compliance database in Thailand.