European Journal of Law and Economics

, Volume 42, Issue 3, pp 405–444 | Cite as

Tax compliance behaviour during the crisis: the case of Greek SMEs

  • Georgia Kaplanoglou
  • Vassilis T. Rapanos
  • Nikolaos Daskalakis


This paper presents the results of a novel survey of 550 small and micro enterprises in Greece regarding their tax compliance behaviour and drawing some useful policy implications for a country facing one of the largest tax gaps in the developed world. We explore the determinants of such behaviour, by integrating economic and psychological perspectives on tax compliance. Results suggest that respondents perceive a strong connection between the quality of political and of tax institutions, while trust seems to play the most significant role in increasing intended compliance and in deterring strategic tax evasion. We contrast the theoretical results with the actual reported compliance behaviour of entrepreneurs and analyse how this behaviour is influenced by factors like perceived nature of power of tax authorities (legitimate versus coercive), perceived fairness of the tax system, etc. The strategy currently followed, that is toughening the profile of tax authorities is a viable short-term response to increase enforced tax compliance. The present study, however, has provided evidence on the multifaceted nature of power and trust and their relation with tax compliance, and the link between power and trust in political regulatory strategies. Current policies seem to completely miss that link.


Greek fiscal crisis SMEs Tax evasion Tax compliance Trust Power 

JEL classification




The authors are grateful to Stephen Hall for very helpful comments and to two anonymous reviewers for their very insightful comments and suggestions. All remaining errors are the authors’ responsibility.


  1. Allingham, M., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1, 323–338.CrossRefGoogle Scholar
  2. Alm, J. (2012). Measuring, explaining, and controlling tax evasion: Lessons from theory, experiments and field studies. International Tax and Public Finance, 19, 54–77.CrossRefGoogle Scholar
  3. Alm, J., Bloomquist, K. M., & McKee, M. (2015). On the external validity of laboratory tax compliance experiments. Economic Inquiry, 53(2), 1170–1186.CrossRefGoogle Scholar
  4. Alm, J., Kirchler, E., Muehlbacher, S., Gangl, K., Hofmann, E., Kogler, C., et al. (2012). Rethinking the research paradigms for analysing tax compliance behaviour. CESifo, Forum, 2, 33–40.Google Scholar
  5. Alm, J., & Torgler, B. (2006). Cultural differences and tax morale in the United States and in Europe. Journal of Economic Psychology, 27, 224–246.CrossRefGoogle Scholar
  6. Andreoni, J., Erard, B., & Feinstein, J. (1998). Tax compliance. Journal of Economic Literature, 36(2), 818–860.Google Scholar
  7. Arachi, G., & Santoro, A. (2007). Tax enforcement for SMEs: Lessons from the Italian experience? eJournal of Tax Research, 5(2), 225–243.Google Scholar
  8. Choo, L., Fonseca, M., & Myles, G. (2016). Do students behave like real taxpayers in the lab? Evidence from a real effort tax compliance experiment. Journal of Economic Behaviour and Organization, 124, 102–114.CrossRefGoogle Scholar
  9. European Commission. (2014). Annual report on European SMEs 2013/2014—a partial and fragile recovery. Brussels: Final Report.Google Scholar
  10. Feld, L. P., & Frey, B. S. (2007). Tax compliance as the result of a psychological tax contract: The role of incentives and responsive regulation. Law and Policy, 29, 102–120.CrossRefGoogle Scholar
  11. Gangl, K., Hofmann, E., & Kirchler, E. (2015). Tax authorities’ interaction with taxpayers: a conception of compliance in social dilemmas by power and trust. New Ideas in Psychology, 37, 13–23.CrossRefGoogle Scholar
  12. Gobena, L. B., & Van Dijke, M. (2016). Power, justice and trust: A moderated mediation analysis of tax compliance among Ethiopian business owners. Journal of Economic Psychology, 52, 24–37.CrossRefGoogle Scholar
  13. Hessing, D. J., Elffers, H., & Weigel, R. H. (1988). Exploring the limits of self-reports and reasoned action: An investigation of the psychology of tax evasion behaviour. Journal of Personality and Social Psychology, 54(3), 405–413.CrossRefGoogle Scholar
  14. Hosmer, D. W., & Lemeshow, S. (2000). Applied logistic regression (2nd ed.). New York: Wiley.CrossRefGoogle Scholar
  15. Kaplanoglou, G., & Rapanos, V. T. (2015). Why do people evade taxes? New experimental evidence from Greece. Journal of Behavioural and Experimental Economics, 56, 21–32.CrossRefGoogle Scholar
  16. Kastlunger, B., Lozza, E., Kirchler, E., & Schabmann, A. (2013). Powerful authorities and trusting citizens: The Slippery Slope Framework and tax compliance in Italy. Journal of Economic Psychology, 34, 36–45.CrossRefGoogle Scholar
  17. Kirchler, E. (2007). The economic psychology of tax behaviour. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  18. Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary compliance: The “Slippery Slope” Framework. Journal of Economic Psychology, 29, 210–225.CrossRefGoogle Scholar
  19. Kirchler, E., Kogler, C., & Muehlbacher, S. (2014). Cooperative tax compliance: from deterrence to deference. Current Directions in Psychological Science, 23(2), 87–92.CrossRefGoogle Scholar
  20. Kirchler, E., & Wahl, I. (2010). Tax compliance inventory TAX-I: Designing an inventory for surveys of tax compliance. Journal of Economic Psychology, 31, 331–346.CrossRefGoogle Scholar
  21. Kogler, C., Batrancea, L., Nichita, A., Pantya, J., Belianin, A., & Kirchler, E. (2013). Trust and power as determinants of tax compliance: Testing the assumptions of the slippery slope framework in Austria, Hungary, Romania and Russia. Journal of Economic Psychology, 34, 169–180.CrossRefGoogle Scholar
  22. Lozza, E., Kastlunger, B., Tagliabue, S., & Kirchler, E. (2013). The relationship between political ideology and attitudes toward tax compliance: The case of Italian taxpayers. Journal of Social and Political Psychology, 1(1), 51–73.CrossRefGoogle Scholar
  23. McCullagh, P. (1980). Regression models for ordinal data (with discussion). Journal of the Royal Statistical Society: Series B, 42, 109–142.Google Scholar
  24. Ministry of Finance. (2011). Statistical bulletin of tax data for the financial year 2009. Athens: General Secretariat for Information Systems.Google Scholar
  25. Muehlbacher, S., Kirchler, E., & Schwarzenberger, H. (2011a). Voluntary versus enforced tax compliance: Empirical evidence for the “Slippery Slope” Framework. European Journal of Law and Economics, 32, 89–97.CrossRefGoogle Scholar
  26. Muehlbacher, S., Kogler, C., & Kirchler, E. (2011). An empirical testing of the slippery slope framework: The role of trust and power in explaining tax Compliance, University of Vienna Working Paper.Google Scholar
  27. Ng, K.-Y., & Chua, R. Y. J. (2006). Do I contribute more when I trust more? Differential effects of cognition- and affect-based trust. Management and Organization Review, 2(1), 43–66.CrossRefGoogle Scholar
  28. OECD. (2011). OECD economic surveys. Paris: OECD.Google Scholar
  29. Park, H. M. (2009). Regression models for ordinal and nominal dependent variables using SAS, Stat, Limdep and SPSS. Working Paper, The University Information Technology Services (UITS) Center for Statistical and Mathematical Computing, Indiana University.Google Scholar
  30. Pickhardt, M., & Prinz, A. (2014). Behavioural dynamics of tax evasion—a survey. Journal of Economic Psychology, 40, 1–19.CrossRefGoogle Scholar
  31. Pickhardt, M., & Seibold, G. (2014). Income tax evasion dynamics: Evidence from an agent-based econophyics model. Journal of Economic Psychology, 40, 147–160.CrossRefGoogle Scholar
  32. Rapanos, V. T., & Kaplanoglou, G. (2014). Governance, growth and the recent economic crisis: The case of Greece and Cyprus. Cyprus Economic Policy Review, 8(1), 3–34.Google Scholar
  33. Schneider, F., & Buehn, A. (2012). Shadow economies in highly developed OECD countries: What are the driving forces?. IZA Discussion Paper No. 6891, Institute for the Study of Labor, Bonn, Germany.Google Scholar
  34. Turner, J. C. (2005). Explaining the nature of power: A three-process theory. European Journal of Social Psychology, 35, 1–22.CrossRefGoogle Scholar
  35. Verboon, P., & Goslinga, S. (2009). The role of fairness in tax compliance. Netherlands Journal of Psychology, 65(4), 136–145.CrossRefGoogle Scholar
  36. Wahl, I., Kastlunger, B., & Kirchler, E. (2010a). Trust in authorities and power to enforce tax compliance: an empirical analysis of the “slippery slope framework”. Law and Policy, 32(4), 383–406.CrossRefGoogle Scholar
  37. Wahl, I., Muehlbacher, S., & Kirchler, E. (2010b). The impact of voting on tax payments. Kyklos, 63, 144–158.CrossRefGoogle Scholar
  38. World Bank. (2012). Worldwide governance indicators.
  39. World Economic Forum. (2008). Global competitiveness report. Geneva.Google Scholar
  40. World Economic Forum. (2012). Global competitiveness report. Geneva.Google Scholar
  41. World Economic Forum. (2014). Global competitiveness report. Geneva.Google Scholar

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Georgia Kaplanoglou
    • 1
  • Vassilis T. Rapanos
    • 1
  • Nikolaos Daskalakis
    • 2
  1. 1.Economics DepartmentUniversity of AthensAthensGreece
  2. 2.Brighton Business SchoolUniversity of BrightonBrightonUK

Personalised recommendations