THE IMPACT OF CORRUPTION ON TAX MORALE: A STUDY OF SELECT BUSINESS ORGANIZATIONS IN ADDIS ABABA, ETHIOPIA

Abstract

The overall purpose of this study is to assess the impact corruption on tax morale. The researcher used survey method for the study. Data for the survey study were collected from the target populations by means of self-administered questionnaire. From the populations, the sample was select by using stratified sampling to obtain a representative sample from taxpayers of business organization. An ordered probit model is employed to analyze the impact of corruption on tax morale. The results showed that tax morale (dependent variable) is correlated at -0.3093 with corruption at 5 percent significance level and there is a significant negative correlation between corruption and tax morale at a p value of 0.048. Citizens feel cheated if corruption is widespread, their tax burden is not spent well, and that they are not protected by the rules of law. Therefore, the government should work a lot to combat corruption and balance government service and the paid tax.