NATIONAL CULTURE AS MODERATOR BETWEEN SOCIAL NORM, RELIGIOSITY, AND TAX EVASION: META-ANALYSIS STUDY

NATIONAL CULTURE AS MODERATOR BETWEEN SOCIAL NORM, RELIGIOSITY, AND TAX EVASION: META-ANALYSIS STUDY

 Abstract. The research purpose is to present meta-analysis results of the relationship between social norms and religiosity on tax evasion using national culture as a moderator variable. The previous results showed mixed results about the relationship between social norms, religiosity, and tax evasion. Meta-analysis is considered as a way out of saturated and inconsistent research because it provides an efficient and systematic approach to provide robust conclusions. This research is synthesizing a total of 54 results from 14 individual articles published from 1989 to 2017. This study shows three main findings. Although social norms are not effective in combating tax evasion, religiosity is a useful tool in decreasing tax evasion. Theoretically, national culture plays a vital role as moderating variables of social norm and religiosity on tax evasion. Still, this variable cannot moderate the relationship between both two independent variables and tax evasion. These findings show that the theory of planned behavior is inconsistent in predicting the influence of social norms on tax evasion. In practice, tax authorities should consider involving religious leaders to encourage people’s awareness of tax compliance and decreasing tax evasion.

Keywords: Hofstede’s cultural, dimension, meta-analysis, religiosity, social norms, tax evasion

JEL Classification: H23, K42

Introduction

Tax evasion is a severe problem in various countries. Tax evasion defined as an attempt to reduce tax payments in violation of the law (Franzoni, 1998). This act causes the loss of state revenue from the tax sector (Mazur, Plumley, & Plumpley, 2007). In the long term, tax evasion causes revenue losses about 1% of Gross Domestic Product (GDP) in member countries of the Organization of Economic Cooperation and Development (OECD), and 1.5% of GDP in the country non-OECD (Crivelli, De Mooij, & Keen, 2015). A further consequence of reduced tax revenue is the weakening of the government’s ability to provide public goods and social facilities (Marandu, Mbekomize, & Ifezue, 2015).

In the academic realm, the tax evasion phenomenon as an important topic that needs to be explored comprehensively (Mahaputra, Rustiarini, Anggraini, & Sudiartana, 2018). The event of tax evasion is difficult to observe, so there is not much empirical evidence that shows the results of research on the determinants of tax evasion. The tax compliance variable is more popular to be used by most researchers than the tax evasion variable. The researcher considers that the process of identifying the determinants of tax evasion is a daunting task given the limitations of high-quality data (Khlif & Achek, 2015).

The community and its environment as an essential factor because that influences the taxpayer’s decision to comply or be involved in tax evasion (Alm, Kirchler, & Muehlbacher, 2012). This condition called social norms that are the social aspects of psychology that determine whether a person will obey or not. This aspect will influence the behavior of his family, group, and community (Hashimzade, Myles, Page, & Rablen, 2014, 2015). Consistent with this trend, some researchers have begun to pay more intensive attention to their social and environmental conditions as an essential determinant of tax compliance (Alm & Torgler, 2006; Chang & Lai, 2004; Fortin, Lacroix, & Villeval, 2007; Torgler, 2006). The results showed the relationship between social norms and tax evasion showed mixed results. Some researchers conclude that social norms play an essential role in reducing tax evasion (Alleyne & Harris, 2017; Richardson, 2006), but several other studies show the opposite results (Petee, Milner, & Welch, 1994; Wenzel, 2004).

Other psychological aspects that influence the level of tax evasion are one’s spiritual level (Benk, Budak, Yüzbaşı, & Mohdali, 2016; Benk, McGee, & Yuzbasi, 2015). Based on divine authority, this religiosity is unique because it is the source of three aspects simultaneously, namely personal trust, social life, and even becomes a source in formal legal issues both directly and indirectly (Mackie, Moneti, Shakya, & Denny, 2015). In line with social norms, various empirical studies examining the effect of religiosity on tax evasion also do not produce firm conclusions. Some studies show that by adopting a particular religion or having specific obedience, there is a tendency for tax evasion to be lower (Alm, Clark, & Leibel, 2016; Grasmick, Bursik Jr, & Cochran, 1991; Richardson, 2008). Nevertheless, the studies show the opposite result (Cason, Friesen, & Gangadharan, 2016), or a relationship is not so clear (Boone, Khurana, & Raman, 2012; Torgler, 2004).

Starting from the inconsistency research results of the relationship between social norms and religious with tax evasion, this study uses moderator variables to strengthen the influence of social norms and religious variables to tax evasion. One of the potential variables to be a moderator variable is cultural variables, as reflected in Hofstede’s cultural dimensions (Hofstede, Hofstede, & Minkov, 2010). Hofstede (1980) found that there are essential differences in the habits and behaviors that are specific to each country that is influenced by the culture of each country. Previous research using aspects of national culture from Hofstede (1980) as antecedents affecting tax evasion (Mahaputra et al., 2018; Richardson, 2006; Tsakumis, Curatola, & Porcano, 2007). Thus, culture becomes one of the exciting topics that affect the taxpayer’s behavior. This research employing four essential dimensions of Hofstede’s national culture, such as power distance, individualism, masculinity, and uncertainty avoidance, to empirically moderated the relationship between social norms and religiosity to tax evasion. Then, one more dimension added in 2010, namely long term orientation (Hofstede et al., 2010), but not discussed in this study because it is less relevant to this topic.

The purpose of this study is to synthesize research results related to the influence of social norms and religious level on tax evasion. Based on search results in various scientific publications, no synthesis research focuses on the relationship between social norms and religious and tax evasion. Blackwell’s (2007) research that uses meta-analysis tried to synthesize 20 experimental studies, but the factors studied were audit, sanctions, and the availability of public goods and their relationship to tax compliance. Other researchers using the same method also synthesized the effect of socio-demographic factors as determining the level of tax compliance (Hofmann, Voracek, Bock, & Kirchler, 2017). Also, there is a tendency that meta-analysis only focuses on primary research types with a single research method. For example, Blackwell (2007) focuses on experimental-based research, while Hofmann et al. (2017) used survey-based research material. To bridging the research gap, this research will review and synthesize various studies using meta-analysis related to the relationship between social norms and religious and tax evasion, using raw materials in the form of primary research based on experiments, surveys, and secondary data.

By synthesizing 64 findings from 14 individual articles, this study provides different conclusions between social norms and religiosity. The influence of social norms is not significant in reducing the level of tax evasion. On the other hand, the better of religiosity level, the lower of individual potential to be involved in tax evasion. Besides, heterogeneity analysis shows that the two components of high culture, namely individualism and uncertainty avoidance, are moderating variables in the relationship between social norms and tax evasion. Whereas in the relationship between religiosity and tax evasion, the four cultural dimensions, both power distance, individualism, masculinity, and uncertainty avoidance, have not been proven to act as moderator variables. Thus, this research is to provide a convincing conclusion (robust conclusion) related to the influence of social norms and religious level on tax evasion.

In the next section, this paper will explain the background theory and literature review related to tax evasion. Ina section 3, the research methodology will be described. Furthermore, the results of the study will be presented and continued with the discussion and analysis of these results. Finally, the conclusions were presented in section 5.

1. Theoretical analysis and hypotheses development

Theory of planned behavior

One fundamental theory that explains the influence of social norms and religiosity on tax evasion is the Theory of Planned Behavior. Theory of Planned Behavior (TPB) popularized by Ajzen (1991). TPB is a development of the Theory of Reasoned Action (TRA) put forward by Fishbein & Ajzen in 1975. TRA states that a person tends to have a behavior based on the results of his evaluation that the act will produce positive and beneficial things. This TRA assumes that a person’s behavior is not compulsion and is entirely within the person’s self-control. However, further findings show that this behavior is not always voluntary and under control. Therefore, Ajzen (1991) developed TPB, which is a refinement of the TRA.

Planned behavior refers to a person’s behavior, which is planned based on information received or their perception of existing conditions or possibilities that will occur (Puspita, Subroto, & Baridwan, 2016; Rustiarini & Sunarsih, 2017; Verplanken & Aarts, 1999). Referring to TPB, a person’s behavior will be determined by the intention (intention) that depends on three essential things. First, a person’s attitude is related to action (attitude). Second, subjective norms inherent in the person (subjective norms) and the last is the possibility of supervision and control over the behavior that he will do (perceived behavioral control) (Ajzen, 1991; Langham, Paulsen, & Hartel, 2012; Onu & Oats, 2014). Here, social norms and religiosity play an essential role in formulating the three aspects determining the intention. Although there is a possibility of interaction between religious and social norms, religiosity tends to shape attitudes and subjective norms. In contrast, social norms tend to influence the formation of perceived behavioral control.

Social norms and tax evasion

The social aspects of psychology take part in deciding whether a person will obey or not (Ajzen, 1991), such as social norms. Social norms defined as social psychological constructs that refer to agreements between related parties in a community or groups that are related to the commands and prohibitions that bind members of the community without formal rules and law enforcement on orders (Bobek, Hageman, & Kelliher, 2011, 2013). This aspect influenced by the behavior of their family, group, and community where they live on tax obligations (Benk et al., 2016, 2015).

More specifically, social norms can group into subjective norms, injunctive norms, and descriptive norms (Bobek et al., 2011, 2013; Mackie et al., 2015). The first construction, subjective norms refer to someone’s perceptions regarding the views or behavior of friends or family related to tax. The other building, injunctive norms, are opinions of a person regarding the conduct or actions of colleagues in the same group as the same income or the same social class. The third construction, descriptive norms, refers to one’s perception of the general public’s perspective on taxes. If a close friend or family member tends to disobey or a group of colleagues is generally hiding his income, someone also tends to violate. If the general public considers tax evasion efforts as standard, not regarded as illegal or unethical acts, then there is a tendency for embezzlement rates to increase (Alm, Bloomquist, & McKee, 2017).

The results showed the relationship between social norms and tax evasion have mixed results. Some researchers conclude that social norms play an essential role in reducing tax evasion (Alleyne & Harris, 2017; Richardson, 2006), but several other studies show the opposite results (Petee et al., 1994; Wenzel, 2004). Even so, rationality shows that if a person will be surrounded by people who tend to be tax-compliant, so does his business colleague tend to pay taxes correctly, the less likely that person is to embezzle taxes. In general, social norms said to be good and positive if social conditions encourage people to be more obedient in carrying out their obligations. From the description above, the hypothesis is:

H1: The better the view of social norms on taxes, the lower tax evasion level.

Religiosity and tax evasion

Besides the social environment that influences one’s behavior related to tax, another psychological aspect that influences are one’s level of religiosity. Religiosity is unique because it is the source of three simultaneously characters, namely elements of personal trust, issues of social life, and even becomes a source in formal legal problems both directly and indirectly (Mackie et al., 2015). As a source of personal inspiration, religion consists of commands, prohibitions, rewards, and sins for followers. As an inspiration to the social aspects, the three celestial religions, such as Judaism, Christianity, and Islam, not only regulate relations with God but also regulate relationships between humans by banning greed and ordering followers to help the poor (Kepes, 2016; Kunkle, 2008). As an inspiration in the field of law, several countries such as Iran, Saudi Arabia, and the Vatican use codes in religion to become favorable state laws (Kishi, Cooperman, & Schiller, 2017). In academic research, this religiosity divided into two types, namely religiosity based relational and religious-based piety (Benk et al., 2016).

In line with social norms, various empirical studies examining the effect of religiosity on tax evasion also do not produce uniform conclusions. Some studies show that by adopting a particular religion or having unwavering obedience, there is a tendency for tax evasion to be lower (Alm et al., 2016; Grasmick et al., 1991; Richardson, 2008). While some other studies show the opposite (Cason et al., 2016) or manifest a relationship that is not so clear (Boone et al., 2012; Torgler, 2004). However, logically, when religion teaches honesty and encourages people to do charity and variety with others, one’s attachment and obedience to the teachings of their religion should encourage one not to be involved in tax evasion. From the description above, the hypothesis is:

H2: The higher the individual‘s religiosity, the lower of tax evasion level.

Social norms, religiosity, national culture, and tax evasion

One theory related to cultural differences between countries is elaborated through the concept of Hofstede’s cultural dimensions. Culture is defined as the collective thinking that is in the mind of a society, which distinguishes the members of a community with other parties (Hofstede, 1980). The culture has a strong influence in determining one’s perception, psychology, and behavior. Cultural influences not only affect daily routine in society but also affect the relationship between citizens and government, including taxes (Richardson, 2008; Tsakumis et al., 2007). The national culture also may encourage or inhibit tax avoidance or tax evasion behavior, regardless of individual taxpayer characteristics or another institutional component (Bame-Aldred, Cullen, Martin, & Parboteeah, 2013).

Then, related to the possibility of a cultural dimension as a moderating variable, there is a tendency that in countries with high power distance, dependence on those who have power tends to be extensive (Hofstede et al., 2010). In countries with high power distance, social influence on members of people tends to be more intensive compared to countries with low power distance. In countries with high power distance, social norms are more positive towards taxes and higher levels of religiosity, the presence of good leaders will encourage more compliant communities so that tax evasion is lower. On the other hand, in countries with high power distance, there is a tendency for the taxation system to favor the ruling party and is seen as causing injustice to the general public (Richardson, 2008). Thus, although social conditions are generally favorable, disillusionment with the existing system will encourage people to become disobedient and increase the level of tax evasion. Even in highly religious countries, an unjust system encourages people to disobey because they feel that there is insecurity about the management of the taxes they are paying.

Individualism shows how strong the ties between one individual and other individuals in a community. Individualism is often associated with the opposite, namely collectivism. A high individualism index indicates that culture is more concerned with individual interests above the common interests. While in countries with a low individualism index, collective investments are considered far more important than personal interests (Hofstede et al., 2010). Respect for individual rights in countries with high individualism tends to encourage the state to emphasize equal rights for each individual. This equality of rights helps law to be upheld indiscriminately. Thus, when existing social norms support stronger adherence to tax regulations and reliability, law enforcement indiscriminately and reasonably will be an essential aspect to reduce the level of tax evasion. Although on the one hand law enforcement would be better to suppress the level of tax evasion, on the other hand, the more significant interests of individuals in countries with high individualism also allow one to make every effort to find a loophole in tax regulations, which in turn can encourage fraud the greater one.

Masculinity refers to how big the role and position of gender in society. In a country with a high masculinity index, men tend to see men as superior, performance-oriented, and material success. While low masculinity indicates a tendency and orientation towards shared prosperity and caring for others (Hofstede et al., 2010). On the one hand, a high appreciation of performance in countries with high masculinity encourages people not to tolerate fraud. When social norms encourage people to obey, religious teachings prevent people from deviating, and then in countries with high masculinity, it will tend to be tax evasion lower. On the other hand, a tendency towards orientation towards material success in countries with high masculinity can encourage people to engage in actions that harm those around them, even though the social environment and religious teachings forbid it.

The high uncertainty avoidance index shows a high level of public anxiety over the threat of uncertainty. To reduce this uncertainty, there is a tendency to make more formal laws. As a result, the legal system tends to be complicated (Hofstede et al., 2010). The many official rules, on the one hand, provide certainty for the public to carry out tax obligations. Thus, when the social environment is positive, and religion is strong, this condition encourages taxpayers to become more obedient.

But on the other hand, the complexity of the rules often overlaps the rules. As a result, the level of tax non-compliance tends to increase (Richardson, 2008; Tsakumis et al., 2007). From the description above, the hypothesis is:

H1a:    Power distance moderates the relationship between social norms and tax evasion.

H1b:  Individualism moderates the relationship between social norms and tax evasion.

H1c:  Masculinity moderates the relationship between social norms and tax evasion.

H1d:    Uncertainty avoidance moderates the relationship between social norms and tax evasion.

H2a:    Power distance moderates the relationship between religiosity and tax evasion.

H2b:  Individualism moderates the relationship between religiosity and tax evasion.

H2c:  Masculinity moderates the relationship between religiosity and tax evasion.

H2d:    Uncertainty avoidance moderates the relationship between religion and tax evasion.

2. Research method

Study criteria

This study uses meta-analysis to analyze hypotheses research. Meta-analysis as a powerful tool to obtain adequate confidence in a problem, where the results of previous studies have produced inconsistent conclusions, particularly related to factors that determine tax evasion (Marandu et al., 2015). Using meta-analysis, findings of earlier studies are summarized, analyzed, and then integrated to reexamine the relationship between independent factors and the dependent variables that are at issue.

Determining keywords to be used in gathering primary (individual) articles that will be used as study material is the first step in this research. After the keywords are determined, the next step is to utilize electronic databases, such as Proquest, EBSCO, Emerald, Science Direct, JSTOR, and Wiley. By using keywords, the related articles are downloaded and arranged systematically. To get items on the topic of the relationship between social norms and tax evasion, the keywords used are “social norms (or subjective norms, injunctive norms, descriptive norms) and tax evasion.” For the relationship between religiosity and tax evasion, the keywords used are “religiosity (or religion or religious or spiritual) and tax evasion.” For identification and further processing, the file of the article named with a specific system that shows the name of the journal, year, volume, and issue of the publication, author, and title of the article.

The object of research in this study is the results of previous research examining the relationship between social norms and the level of religiosity with tax evasion. In determining the research material to be included in this meta-analysis study, this research used judgment sampling. In other words, deciding whether a research result is an object depends on the assessment of the researcher, according to criteria established beforehand in determining the research sample. The research objects included in this meta-analysis must meet the following requirements:

1. This research makes tax evasion as a dependent variable.
2. This research makes social norms or religiosity as independent variables.
3. This research-based quantitative empirical data. The research results displayed in statistical figures that can be converted into correlation coefficients (r-Pearson).

From the above process, eight articles obtained containing 21 findings related to social norms and six articles with 43 results discussing the religious aspects of public trust. Thus, in total, there were 14 articles with 54 findings from 1989-2017 that selected in this study.

Coding procedure

The information included in coding is general identity, information on the dependent variable, and information on each independent variable, similar to previous research (Lipsey & Wilson, 2001). Collective identities include the study identity code, researchers, year of publication, total sample size, type of tax, unit analysis, an object of study, the population represented. The dependent variable information includes the variables used and how they are measured. While the independent variables include the measurements used, the type of effect size published in the article, the samples used to test the independent variables, as well as some statistical data such as correlation coefficients, standard errors, or t-statistics/F-statistics/chi-square values. These data will eventually be converted into r-Pearson.

Meta-analyses procedures

In this study, meta-analysis used in synthesizing the results of previous studies. Similar to previous research (Ellis, 2010; Hunter & Schmidt, 2004), after the collection and coding of the articles that became the research sample, the next steps are as follows:

1. Transform the relevant statistical results of each primary study into a standardized effect size to be synthesized. The standardized effect size in this study uses the Pearson coefficient (r-Pearson) (Card, 2015; Hunter & Schmidt, 2004; Littell, Corcoran, & Pillai, 2008). The choice of r-Pearson as a measure of conversion based on two important reasons. The first reason, r-Pearson ranges from -1 to 1, so intuitively, the magnitude of r-Pearson can easily be understood. The second reason is the ease of conversion, both from other forms of statistics to r-Pearson and vice versa. If a study displays the r-Pearson value, then that number can be directly used. However, if it only shows other statistical measurements, it can be in the form of t, F, p, or the other. The step taken is to convert the statistical size data into Pearson with the formula commonly used in meta-analysis (Card, 2015).
2. Determine the population mean of correlation (r ̅) using the formula:

Where n_i denotes the number of samples, and r_i showed-Pearson means r-Pearson from the i study.

3. Calculating the statistical significance of the mean, obtained by calculating the variance of the sample of correlations (V_r), standard error (SE_r), and Z score using the following formula:

4. Test the main hypotheses (H1 and H2). If the probability of obtaining this Z score is less than 0.05 (using the excel formula “=NORM.S.DIST (Z, FALSE)”) and within 95% confidence intervals calculated using the method:

If it does not contain zero, the mean effect size is statistically significant.

5. Test the possibility of heterogeneity using the Q-Statistic test with the following formula:

If the Q value exceeds the critical importance of , where k is the total number of findings used in the study, then it can be concluded that the effect size distribution is heterogeneous. The existence of this heterogeneity encourages researchers to look for moderator variables.

6. Identifying moderator variables. Potential candidates from moderator variables can be obtained based on theoretical justification and rationality (Laroche & Soulez, 2012). In this study, the cultural aspect is one of the important factors that is assumed to influence the involvement of taxpayers in tax evasion (Richardson, 2008; Tsakumis et al., 2007). To test whether cultural factors play a significant role as moderators, this study employee a regression using OLS of r-Pearson of each finding with a moderator variable candidate with the econometric model as follows:

Where r shows the r-Pearson coefficient of each finding, x shows a set of continuous variables based on the justification of the theory, and it is possible to be the cause of the variability of research results, such as cultural aspects in Hofstede’s theory. To control the influence of factors outside culture, then the Z notation representing the control variable is included, for example, the type of tax or measurement variable differences. Besides that, there is a tendency for publication to be biased where studies that produce significant conclusions have a higher likelihood of being accepted and published in journals (Abdullah, Doucouliagos, & Manning, 2015; Anderson, D’Orey, Duvendack, & Esposito, 2018). To minimize this, Anderson et al. (2018) proposed to include the standard error (SE) of each finding as a precision adjustment tool. Significant regression results will be an indication that the variable in question is likely to be a moderator variable (Anderson et al., 2018).

3. Results and Discussion

One thing that is common in tax research is that many papers are multi-independent variables and multiple findings. If there is one study that contains more than one found, then all of them will be taken into account as separate research findings (Dochy, Segers, Van den Bossche, & Gijbels, 2003). Details of each paper used along with the number of results presented in Table 1.

Table 1. The Paper Composition (author calculation, processed)

The results of the meta-analysis designed to obtain robust conclusions between social norms and religious norms. It presented in Table 2.

Table 2. Hypothesis Testing – Meta-Analysis

Table 2 shows the relationship between social norms and tax evasion is positive but not significant (r = 0.0696; p (Z) = 0.064; 95% CI = (- 0.001; 0.140)). In other words, the first hypothesis (H1) did not receive adequate support from the results of the meta-analysis in this study. Thus, it can conclude that positive social norms are not necessarily able to reduce the level of tax evasion. On other hand, Table 2 shows that the relationship between religious rates and tax evasion is significantly negative (r = -0.0226; p (Z) = 0.006; 95% CI = (-0.037; -0.007)). The results of the synthesis show fairly convincing support (robust) for the second hypothesis (H2). Thus, it can conclude that the higher religious level of taxpayers is an effective barrier for tax evasion efforts.

The results of the statistical Q calculation show the existence of heterogeneity, both related to social norms (Q = 860; ²=31; p<0,001), or religiosity (Q=846; ²=58; p<0,001), as shown in Table 3.

Table 3. Heterogeneity Analysis

The existence of heterogeneity encourages researchers to investigate the source of heterogeneity through the analysis of moderator variables. In other words, some variables that moderate the variability of the relationship between social norms and religious and tax evasion. To further test the probability of potential moderator variables, r-Pearson of each finding will be regressed with these potential variables — the results of the regression related to these cultural aspects presented in Table 4 and Table 5.

Table 4. Heterogeneity Analysis – Regression (National Culture and Social Norms)

Table 5. Heterogeneity Analysis – Regression – (National Culture and Religiosity)

Table 4 appears that the coefficient of individualism and uncertainty avoidance are significant, while power distance and masculinity are not. Thus, only H1b and H1d hypotheses supported by the results of this meta-analysis. Meanwhile, by using religious aspects, Table 5 shows that among the four dimensions, there is no significant coefficient. It is means, the results of this study do not support both the H2a, H2b, H2c, and H2d hypotheses. In other words, the cultural aspect does not become a moderator variable that influences the relationship between public trust and tax evasion.

The exciting thing from this research is related to social norms. The effect of positive social norms on taxes in reducing tax evasion is not only insignificant but also not by predictions of the theory of planned behavior. On the contrary, the effect of religiosity on tax evasion is following the theory of planned behavior predictions and also significant.

The data showed in Tables 2 and 4 relating to the influence of social norms on tax evasion shows that when social norms are associated with aspects of tax evasion, it turns out that the results are not following the Theory of Planned Behavior. The results of this study indicate that better social norms do not have much effect on efforts to reduce tax evasion. The average r-Pearson coefficient shows a positive number. Several factors cause this result. First, a biased response is most likely to occur. In this meta-analysis study, most of the research sample used questionnaires or surveys to measure social norms. The use of surveys or questionnaires is indeed able to obtain data from the intended respondent directly. However, the answers given are not answers following reality or truth, but answers that are considered useful or are considered correct by the general public. As a result, there is the possibility of being subjective or even biased. This finding is in line with what is worried by Brizi, Giacomantonio, Schumpe, & Mannetti (2015).

Secondly, there is a possibility that social norms, as an external factor. There are not independent factors as factors that reduce tax evasion but can only function in tax evasion efforts when there are other actions carried out by tax authorities such as auditing and the imposition of penalties. In most democratic countries that use a self-assessment system, what was paid and reported by the taxpayer is considered correct, unless the tax authority has proof that the taxpayer is guilty. In other words, tax evasion can only be known if an audit has been carried out by the tax authority. Although environmental and social norms consider tax evasion to be unethical or even illegal, it will not appear or be known to the public without supporting actions by tax authorities such as auditing. This finding supports Wenzel (2004) concluded. In research using a questionnaire to measure the level of closeness or social concern of a person, as well as using income that not reported as a measure of tax evasion. Wenzel (2004) shows that when social norms stand alone as independent variables, both using a correlation measure or using regression, social norms consistently shows a positive coefficient. In other words, social norms increase tax evasion. However, when interacted with strict sanctions, social norms function well as aspects that reduce the level of tax evasion.

Third, this social norm does not affect the tax evasion due to the independent attitude of the taxpayer. When deciding on risky actions such as tax evasion, a person more influenced by beliefs and values ​​that exist in themselves, while social norms are external factors that need to be internalized in taxpayers when making decisions. It is also possible that when asked about social aspects, the respondents answered were things that were actually of personal interest. Sometimes too, when taking illegal actions, the attitude of a person from the beginning is evident, and social factors only complement the consideration without affecting much of the original attitude. This finding is consistent with what is stressed by Sigala, Burgoyne, & Webley (1999).

Although deemed ineffective, several factors moderate the relationship between social norms and tax evasion. As presented in table 3, two cultural dimensions influence this relationship, namely individualism and uncertainty avoidance. Cultural factors reflected in individualism have a significant role in shaping the relationship between social norms and tax evasion. Table 3 shows that the coefficient is negative. The high individualism index is characterized by people’s attitudes that tend not to tolerate cheating, which harms other community members (Hofstede et al., 2010).

Moreover, if coupled with more positive social controls and social norms, that attitude becomes harder. As a result, in a country with a high power distance, better and positive social norms will provide even more significant obstacles for someone who intends to evade taxes. This is shown by the negative individualism coefficient, which shows that when social norm becomes more positive about taxes, tax evasion is lower in countries with high power distance.

The next cultural factor that becomes a moderator variable in the relationship between social norms and tax evasion is uncertainty avoidance. The uncertainty avoidance aspect, as shown in Table 3, shows the significant positive moderating role. The high uncertainty avoidance index shows a high level of public anxiety over the threat of uncertainty. Besides, in countries with a high index of uncertainty avoidance, it is also characterized by a high distrust of the government in general (Hofstede et al., 2010) and complicated regulations. As a result, the level of non-compliance tax tends to increase (Richardson, 2008; Tsakumis et al., 2007). Thus, when social norms get better but not matched by improvements at the government level, uncertainty will increase. The taxpayers tend to be involved in tax evasion to reduce uncertainty (Richardson, 2008; Tsakumis et al., 2007).

The data presented in Tables 2 and Table 3, related to the influence of the level of religious practice on tax evasion, presents several essential things. First, when viewed from the effort of synthesizing various studies, the results of the meta-analysis show that a better level of religiosity can reduce tax evasion efforts. The religious aspect can be seen from the level of religiosity in general, the involvement of a person with a particular religion, or it can also be measured from one’s obedience in carrying out his religious orders. Based on divine authority, religion contains commands, prohibitions, rewards, and sins. This divine authority becomes an internal motivator that is very important for one’s behavior. Religion, besides offering hope for its adherents and heaven, also provides threats in the form of sin and hell for its offenders. Ideally, the higher one’s religiosity, the greater the influence of religion in shaping the person’s characteristics and behavior, including taxation. Religion that teaches to share with others, avoid selfishness, and condemn fraud or violation of the law will significantly reduce a person’s efforts to get involved in tax evasion.

Second, analyzing the moderating factors in the relationship between religiosity and tax evasion shows cultural absence in a significant factor as a moderating variable. The results of the heterogeneity analysis show that culture does not influence the relationship. One answer to this anomaly is a unique character, position, and function of religion. Religion not only functions as a personal norm but also influences social, even legal and political norms. As a personal norm, religion offers hope in the form of rewards for good and the threat of sin for evil and ugliness. Besides the lure of heaven and hell in return for personal merit and sin, various religions also have universal teachings in the form of caring for others and disagreements over greediness. Even in various religious teachings explicitly, there are orders to share. An example is a zakat in Islam or tenths in Christianity. In other religions, such as Judaism, Hinduism, or Buddhism, there are also teachings of sacrifice not only for God but also for others (Kepes, 2016; Kunkle, 2008).

In the field of law, in some countries, religious teachings are an essential source and inspiration for the law. There are even countries that make religion a positive law, such as in Saudi Arabia and Iran (Kishi et al., 2017). By making religious teachings a positive law, it means that there is the direct involvement of religion in state politics. Of course, the influence of belief as a personal, social, legal, and political norm will be understood and responded differently, even by the same adherents. The cause of differences in the behavior of adherents of the same religion, also though it tends to be taught the same. The uniqueness of religion and the different responses of adherents may be the cause; religion becomes independent of the influence of other factors, including culture. In other words, the religious element is strong enough to influence the behavior of its adherents. The findings of this study are in line with what was delivered by several other studies (Alm & Torgler, 2006; Benk & Budak, 2012; Mackie et al., 2015; Weaver & Agle, 2002).

Conclusions

In this meta-analysis study, this study investigates the effect of social and religious norms on tax evasion. The Theory of Planned Behavior predicts that positive social norms and better levels of religiosity will reduce tax evasion. In this study, theoretical predictions do not apply to social norms but supported by research findings related to the spiritual level. By reviewing and synthesizing 54 results from 14 individual articles, this study shows that social norms are not as effective as a means of reducing tax evasion. On the other hand, this study shows a robust conclusion that a better level of religiosity plays a useful role in reducing tax evasion.

The results of heterogeneity analysis show that cultural factors, as reflected in Hofstede’s cultural dimensions, play an essential role as moderator variables that influence the relationship between social norms and tax evasion. In contrast, this study shows that the four aspects of culture do not affect religious affiliation with tax evasion. In other words, there is a tendency that the role of religion in reducing taxes is universal.

The findings of this meta-analysis study should be of concern to policymakers. The ineffectiveness of social norms as a means to reduce tax evasion, encourage tax authorities to re-evaluate policies that seek to form a more positive social and community view of taxes. Besides the long process, the control over it is outside the tax authority. It would be far better if the tax authorities maximize cooperation with religious leaders to increase awareness and positive outlook on religion towards taxes.

Some limitations of this study need to consider. First, this study only focuses on social norms and religiosity as determinants of tax evasion. Further research could investigate other aspects both in the form of law enforcement and issues of service quality from the government. Second, when conducting heterogeneity analysis to find moderator variables, this study bases on the concept of Hofstede’s cultural dimension when discussing cultural aspects as moderator variables. The idea is long counted because it was first published in 1980. It was updated in 2010, and some researchers (Eringa, Caudron, Rieck, Xie, & Gerhardt, 2015; Merritt, 2000; Minkov, 2018) concluded that the concept could still be used, it is possible that these concepts not following current conditions.

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