Research Seminar "Decoding Tax Behaviour: Insights from the Theory of Planned Behaviour" (Natalia Levenko)

Wednesday, Dec 3, 2025 at 11.00-12.00

Narva Rd 18 - 1024 and Zoom

NATALIA LEVENKO (Eesti Pank, TalTech)

Decoding Tax Behaviour: Insights from the Theory of Planned Behaviour

This paper analyses data from a granular survey of Estonian residents conducted in seven rounds between 2018 and 2024. The analysis draws on the Theory of Planned Behaviour (TPB) to explore the drivers of compliance and evasion. In line with the theory, the paper shows that the intention to comply is a strong predictor of actual compliance, as is individuals’ actual control over tax-related actions. Perceived behavioural control also matters for compliance intentions, but only its internal component is relevant. This provides further evidence that theories based on individual rational choice play a limited role in explaining tax behaviour. Building on the TPB, the paper introduces a new typology of taxpayers, distinguishing between dedicated taxpayers, evaders, potential evaders, and potentially honest taxpayers. Using machine-learning methods, the analysis demonstrates that socio-demographic variables alone are weak predictors of taxpayer type. By contrast, norms and beliefs predict compliance, evasion, or intermediate behaviour with an average accuracy of 90 per cent. These findings underline the importance of institutional factors and soft values in shaping tax behaviour, beyond purely economic incentives.