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Received: 20 June 2020 Revised: 21 July 2021 Accepted: 1 October 2021
DOI: 10.1002/pa.2777

RESEARCH ARTICLE

Impact of Big Five personality traits on tax non-compliance

intentions: Mediation effect of perceived tax-fairness

Suaad Jassem1 | Yasser A. Al-Rawi2 | Adil Hussein Ali2

1
Department of Managerial and Financial
Sciences, Al Zahra College for Women, Established behavioural theories have been used to study the impact of perceptions,
Muscat, Oman
attitudes and behaviour on tax compliance however the literature have overlooked
2
Department of Accountancy, College of
Administration and Economics, University of the relationship between the personality traits of taxpayers as defined by the five-
Anbar, Anbar, Iraq factor model (FFM) on tax non-compliance. This study aims to fill this gap by propos-

Correspondence ing a model using the FFM personality traits that examines the impact of the Big Five
Suaad Jassem, Department of Managerial and personality on tax non-compliance intentions, and investigates whether the relation-
Financial Sciences, Al Zahra College for
Women, Muscat, Oman. ships are mediated by tax-fairness perception. Survey questionnaire were collected
Email: [email protected] from 503 taxpayers working in various professions in Malaysia. Using structural
equation modelling to conduct the multivariate analysis, the results were determined
using Smart PLS. The results of the analysis indicate that conscientiousness, agree-
ableness and extraversion are negatively related to tax non-compliance intention,
while neuroticism positively influences tax non-compliance intention. Moreover,
openness to new experience had no significant effect on tax non-compliance inten-
tion. Finally, tax-fairness perception partially mediates all the relationships except for
openness.

KEYWORDS
Big Five, FFM, personality traits, tax evasion, tax non-compliance, tax-fairness

1 | I N T RO DU CT I O N research on determinants of tax non-compliance behaviour need to

delve deeper into aspects of human psychology that can provide clues
Tax revenues are among the primary sources of income for most gov- on how to develop more effective interventions (The World Bank
ernments around the globe. Without a steady revenue stream, for Report, 2018).
instance through income tax, value added tax, sales tax, and so on, the Research indicates that relatively fewer studies have examined
government machinery will not be able to function effectively the relationship between human psychological traits and tax evasion
(Ghilarducci, 2018). Tax evasion or tax non-compliance manifests behaviour. Despite the fact that a recent study has looked at the influ-
itself when taxpayers hide their income and/or inflate expenses to ence of neuroticism, agreeableness and conscientiousness on tax-
pay lower amounts in taxes than expected; such practises lead to rev- payer compliance (Huels & Parboteeah, 2019), it appears that there is
enue shortfall for governments. Past research has tried to determine a dearth of studies employing all dimensions of the five-factor model
the drivers of such tax non-compliance behaviour based on demo- (FFM) of personality traits developed by Costa Jr. and McCrae (1992)
graphic features of taxpayers and other factors that were considered to investigate whether dominant aspects of taxpayer personalities
from perspectives of economic theories and behavioural psychology influence tax non-compliance behaviour.
theories (Beer et al., 2018; Pukeliene & Kazemekaityte, 2016; The FFM framework on personality is based on a set of five broad
Walsh, 2012). An OECD-World Bank report on tax evasion reveals human personality trait domains that are also referred to as the “Big
that conventional approaches to combat tax evasion by threat of pun- Five” in the literature: agreeableness, extraversion, conscientiousness,
ishment have not yielded significant results. The report suggests that openness, and neuroticism (Huels & Parboteeah, 2019). The

J Public Affairs. 2022;22(Suppl. 1):e2777. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1 of 12
https://doi.org/10.1002/pa.2777
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2 of 12 JASSEM ET AL.

framework was developed to represent the variability of personality influence their perceptions about, fairness of taxation regimes, and
in individuals, and its' use of only five dimensions, makes a more parsi- subsequently their disposition regarding paying taxes.
monious conceptualization of human personality traits compared to
prior studies (Soto & Jackson, 2013). There is a broad consensus
among personality psychologists that the FFM framework captures 2 | LI T E RA T U R E RE V I E W
the most vital and basic individual differences in personality traits
(Lim & Chapman, 2021). Furthermore, Rosid et al. (2018) argue that Tax non-compliance (tax evasion) is the under-reporting of taxable
personality traits of individuals are likely to have an influence on their income to pay lower amounts of taxes than is legally due (Allingham &
tax-fairness perceptions. Sandmo, 1972). Tax evasion differs from tax avoidance, which is con-
The extant literature related to behaviour of taxpayers indicates sidered legal, while evasion is achieved through fraudulent means, and
that an important factor that drives disposition of taxpayers towards is considered a financial crime (Sandmo, 2005; Wenzel, 2004). Schol-
proper compliance with tax rules is perception of fairness of the taxa- arly works have looked into tax non-compliance behaviour from vari-
tion policies in their society (Muslichah & Graha, 2018). In a qualita- ous perspectives, such as demographic features (e.g., Jackson &
tive study by Verboon and Goslinga (2009), the authors found that it Milliron, 1986), fairness perceptions (Gilligan & Richardson, 2005;
was important for taxpayers to feel that they were both procedural Rosid et al., 2018; Saad, 2014), complexity of tax laws (Katz &
fairness in the tax assessment as well as empathetic behaviour from Ott, 2006; Pau et al., 2007), taxpayer knowledge about intent and cal-
tax officials. Whenever people perceived unfairness in treatment and culation of taxes (Azmi et al., 2016; Tan & Chin-Fatt, 2000), religiosity
processes, they would resist paying the whole amount of their tax (Nazaruddin, 2019) and other socio-political and economic factors
dues. In another study by Braithwaite (2003), procedural justice in tax (Kasipillai et al., 2003; Marandu et al., 2015).
assessment was found to have significant influence on tax-fairness Although some of the aforesaid studies have attempted to iden-
perceptions of people. Furthermore, such fairness perceptions were tify the antecedents of behavioural intentions in terms of tax non-
significantly related to their decision-making regarding tax avoidance compliance, bulk of these studies have focused on either demographic
behaviour. Additionally, Hassan et al. (2021) studied tax compliance factors (Devos, 2008), or socio-economic theories of behaviour
behaviour of taxpayers in relation to their perceptions about govern- (Hasseldine & Li, 1999). Relatively few studies have investigated influ-
ment spending with revenue collected from taxes. The authors found ence of psychosocial determinants of tax non-compliance behaviour
that when individual taxpayers believed that the revenue collected by (e.g., Arbex et al., 2018; Pickhardt & Prinz, 2014).
the government through taxes is misused, they developed a negative The FFM has been applied by researchers in various contexts and
view of the fairness of the tax system. in different fields of study, demonstrating that FFM traits impact per-
With regards to empirical research related to tax-fairness and tax ceptions, attitudes and human behaviour. For instance, in the context
compliance, it is deemed important to point out that the relationship of technology adoption, the personality traits appear to impact tech-
between the two constructs in the academic literature have been pri- nology acceptance behaviour (Benlian & Hess, 2010; Stajkovic
marily based on established behavioural theories such as theory of et al., 2018). Furthermore, in the field of criminology, studies show
Planned Behaviour and Theory of Reasoned Action, and so on, (Azmi that these traits have an impact on deviant and anti-social behaviour
et al., 2016). Although the relationship between tax-fairness and tax (Guay et al., 2016; Jolliffe, 2013; Vize et al., 2018). The link between
non-compliance behaviour has been established; however, the man- tax-fairness perception and tax non-compliance intentions have been
ner in which such relationships are affected by personality traits of founded on well-known theoretical models such as the Theory of
taxpayers appear to be understudied. Therefore, the primary goal of Planned Behaviour, Theory of Reasoned Action, and so on, (Azmi
this study is to explore how such relationships are affected by person- et al., 2016). However, how such relationships are affected by person-
ality traits of taxpayers. Deriving a finer-grained understanding about ality traits of taxpayers appears to be understudied.
the interaction between personality traits, tax-fairness perceptions,
and tax non-compliance intentions, are expected to carry significance
for both the body of knowledge as well as policymaking and imple- 2.1 | Tax non-compliance intentions
mentation of tax policies.
In light of the preceding discourse, a conceptual framework is Three (3) review articles stand out in the body of knowledge with
proposed in this study, where personality traits based on the FFM regards to research on behaviour regarding tax obligations: Jackson and
(i.e., conscientiousness, agreeableness, openness, extraversion and Milliron (1986), Andreoni et al. (1998) and Pickhardt and Prinz (2014).
neuroticism) represent the independent variables that are hypo- The findings of the review papers suggest that there are two main
thesised to be drivers of tax-fairness perceptions and tax non- streams of thought regarding behaviour of individuals to comply with
compliance intentions. Furthermore, tax-fairness perceptions are pos- or evade tax payments. One stream of research focuses on economic
ited to be a mediator in the relationships between the personality parameters, while the other delves into social and psychological issues.
traits and tax non-compliance intentions. Hence, the assumption The latter stream suggests that beliefs and attitudes of taxpayers deter-
behind the framework developed for the current study, is based on mine intentions and behaviour. Some studies have found that moral
the premise that individual personality of taxpayers is likely to values have a bearing on tax compliance intentions (Alm et al., 1992).
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JASSEM ET AL. 3 of 12

2.2 | Tax-fairness perception lacking in discipline. Neurotic individuals are provoked quickly and are
prone to negative emotions such as irritation, anger and anxiety, rather
In the extant literature on taxation, fairness perceptions regarding tax than being tranquil and emotionally resilient (Barnett et al., 2015). Finally,
policies and regulations are believed to influence public attitude individuals with openness to experience have a broad range of interests
towards tax compliance (e.g., Bin-Nashwan et al., 2020; Gilligan & and rather than being resistant to change, they see change as a new pos-
Richardson, 2005; Hartner et al., 2008; Jimenez & Iyer, 2016; Tan & itive experience. There is a broad consensus among personality psychol-
Chin-Fatt, 2000). Besides other factors, perceived tax-fairness has a ogists that the FFM conceptualises the dominant human traits that drive
bearing on the taxpayers' voluntariness in meeting their obligations to their behaviour (Gilligan & Richardson, 2005; Huels & Parboteeah, 2019;
ensure the government's tax revenue targets are being met (Azmi John et al., 2008; Rosid et al., 2018; Soto & Jackson, 2013).
et al., 2016). When individuals perceive that society over-burdens the
less fortunate with various forms of taxes compared with a small per-
centage of wealthy people who are paying a relatively low amount in 3 | THEORETICAL FRAMEWORK AND
taxes compared to their total wealth. Such perceptions can snowball HY P O T H E S E S
into behavioural manifestations where hiding income and inflating
expenses to pay less tax become the default script (Deyganto, 2018). The FFM model has been used effectively in various fields and contexts
Chan et al. (2000) found that when taxpayers perceive that tax col- to study manifestations of peoples' personality on perceptions, inten-
lected by the government was not being fairly allocated, it contributed tions and behaviours. For example, in the field of information technol-
to perception of unfairness regarding taxation. The work by ogy, studies have shown that FFM traits impact new technology
Gerbing (1988) was significant in the development of a multidimensional adoption behaviour of individuals that are expected to use them in their
conceptualisation of perceived tax-fairness. Based on the distributive jus- work (Mahmud et al., 2017; Murugesan & Jayavelu, 2017). Benlian and
tice theory, the construct was composed of perceptions about general Hess (2010) studied how FFM personality traits of employees impacted
fairness, distribution of tax burden, exchange with government, attitude their perceptions about complexity of new enterprise resource planning
towards taxation of wealthy individuals and preferred tax structure. software and subsequent intentions to adopt the new technology; the
study found that personality affected perceptions and behavioural
intentions regarding adoption of new technology.
2.3 | Five-factor model (Big Five personality traits) Similarly, the FFM personality traits have been applied in under-
standing anti-social behaviour (Dam et al., 2018; Jolliffe, 2013; Vize
Personality has a vital impact on people's psychology and behavioural et al., 2018; Wiebe, 2004). However, there seems to be a dearth of
manifestations (Benlian & Hess, 2010; Contrada et al., 1990). Both studies that deploy the FFM to examine how personality traits are likely
personality and social cognition are significant predictors of human to interact with perceptions and intentions towards tax obligations.
behaviour (Stajkovic et al., 2018). Researchers have widely employed Therefore, drawing parables from studies in other contexts, the FFM
two theories in investigating how human personality traits influence theory offers a sound platform to study how the Big Five personality
their behaviour. First is the FFM (Barrick & Mount, 1991; John & traits impact tax non-compliance intentions with the possibility that
Srivastava, 1999) and second is the Social Cognition theory such relationships are mediated by perceptions of tax-fairness.
(Bandura, 1986). This study employs the FFM originally proposed by
Costa Jr. and McCrae (1992). The reason behind this is that, research
on how human traits could be considered as predictors of tax- 3.1 | Relationship between FFM personality traits,
compliance behaviour can help regulatory bodies to customise tax tax-fairness perceptions and tax non-compliance
regulations and policies that take into account the influence of human intentions
personality traits to comply with tax laws and regulations.
The FFM framework, which is also referred to as the Big Five, is Based on the premise of the FFM theory, conscientiousness, agreeable-
based on five dimensions: extraversion (as opposed to introversion), ness, openness, extraversion and neuroticism are all expected to influence
agreeableness (as opposed to antagonism), conscientiousness (as opp- perceptions and intentions of taxpayers. The FFM theory does not sug-
osed to lacking in direction), neuroticism (as opposed to emotional stabil- gest in any way that people only have a single personality trait, instead it
ity) and openness to new experience (as opposed to close-mindedness). argues that certain personality traits will be dominant in individuals (Costa
These traits are considered as innate disposition of individuals to Jr. & McCrae, 1992). Therefore, the following discourse from the FFM lit-
behave in a certain manner and their behaviours are considered inhe- erature leads to the development of a set of hypotheses.
rent regardless of observational contexts (Barnett et al., 2015).
Highly extraverted individuals are sociable and assertive, rather than
being reserved and preferring to stay in the background. Agreeable indi- 3.1.1 | Conscientiousness
viduals are polite and are programmed to look for amiable solutions,
rather than being argumentative and conflict seeking. Conscientious indi- Conscientiousness refers to a sense of responsibility and being
viduals are orderly and like structure, rather than being disorganised and structured, methodical and goal oriented (Digman, 1989). Research
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4 of 12 JASSEM ET AL.

undertaken in various contexts on individuals with high levels of Zmud (1979) people with extraverted nature have been found to have
conscientiousness indicate the association between personality a positive attitude towards social norms and obligations to society.
traits and task performance—such individuals generally perform bet- Wiebe (2004) reported that extraversion and delinquent behaviour are
ter at work, are more productive and are cognisant of their obliga- negatively correlated. The sociable nature of extraverted people would
tions (Barrick & Mount, 1991). The opposite of conscientiousness suggest that they would be more understanding towards the need to
would be lacking in direction or having low sense of responsibility. fullfill tax obligations. Therefore, it is expected that high levels of extra-
Conscientious people have been found to be more likely to follow version will lead to positive perceptions of tax-fairness and conse-
rules and regulations (Benlian & Hess, 2010). Moreover, literature quently lower levels of tax non-compliance intentions.
indicates a negative correlation between conscientiousness and anti-
social behaviour (Vize et al., 2018). Therefore, it is expected that
people whose dominant trait is conscientiousness, will have a more 3.1.5 | Neuroticism
positive view of tax policies and will be more inclined to meet their
tax obligations, which means they will have a positive outlook on Neuroticism is the degree to which an individual is irritated, angry,
tax-fairness and will be less likely to display tax non-compliance anxious or worried by a stimuli (Barrick & Mount, 1991). The opposite
intentions. of a neurotic individual would be someone who is emotionally stable
and is not easily triggered. Hurtz and Donovan (2000, p.876) state
that “it appears that being calm, secure, well-adjusted and having low
3.1.2 | Agreeableness anxiety has a small but consistently positive impact on job perfor-
mance.” Dam et al. (2018) and Huels and Parboteeah (2019) report
Individuals who manifest high levels of agreeableness in their person- that people with neurotic traits are more prone to committing crimes.
ality are characterised by strong traits of kindness, tolerance, being In general, neurotic people are triggered easily towards negative emo-
trust-worthy and amiable (Barrick & Mount, 1991). The antonym of tions (Benlian & Hess, 2010), and therefore are likely to harbour nega-
agreeableness would be antagonistic, that is, individuals who are tive tax-fairness perceptions and consequently display higher levels of
prone to harbouring conflicting views that lead to similar actions. tax non-compliance intentions. Based on the above discourse, the set
Antagonistic people have been shown to be inclined towards delin- of hypotheses (see Table 1) are posited.
quent behaviour (Wiebe, 2004).
Benlian and Hess (2010) found a positive and significant correla-
tion of agreeableness with perceptions and attitudes towards technol- 3.2 | Relationship between tax-fairness perception
ogy adoption. In the field of criminology, Jolliffe (2013) reported that and tax non-compliance intentions
people with agreeable personality traits are less likely to be involved
in crime. Therefore, it is expected that higher levels of agreeableness The relationship between tax-fairness perception and tax non-
will lead to more positive perceptions on tax-fairness and lower incli- compliance behaviour has been tested by several studies using either
nation towards tax non-compliance behaviour. Theory of Planned Behaviour (Azmi et al., 2016; Gilligan &
Richardson, 2005) or Theory of Reasoned Action (Saad, 2012; Tan &
Chin-Fatt, 2000). Therefore, being in alignment with the findings in
3.1.3 | Openness the above-mentioned literature, this study hypothesise that:

An individual with openness to new experiences will be curious and Hypothesis H5. Tax-fairness perception will have a nega-
inquisitive (Costa Jr. & McCrae, 1992). Dam et al. (2018) found that tive effect on tax non-compliance behaviour.
open-minded people were more comfortable with their current
T A B L E 1 Hypotheses for FFM to tax non-compliance intentions
state and were less likely to display anti-social behaviour. The and tax-fairness perceptions
opposite of openness would be close mindedness about new expe-
Hypotheses on the effect of FFM traits on tax non-
riences and being resistant to change. Open-minded individuals
Code compliance intentions
with curiosity and desire to learn will be motivated to understand
H1 (a–d) Conscientiousness, agreeableness, openness and extraversion
intent and structure of tax policies and will be more inclined
will have negative influence on tax non-compliance
towards having a positive perception of tax-fairness and a negative intentions
view of tax evasion. H2 Neuroticism has a positive effect on tax non-compliance
intentions
H3 (a–d) Conscientiousness, agreeableness, openness and
3.1.4 | Extraversion extraversion, will have positive influence on tax-fairness
perceptions

People who are extraverted are characterised by being sociable, gregar- H4 Neuroticism has a negative effect on tax-fairness
perceptions
ious, confident and assertive (Barrick & Mount, 1991). According to
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JASSEM ET AL. 5 of 12

3.3 | Mediation hypotheses 4.1 | Measurement of Big Five personality traits

Mediation will occur if tax-fairness perception accounts for the rela- The most widely recognised scale for measuring FFM personality
tionship between FFM personality traits and tax non-compliance inten- traits is the NEO Personality Inventory Revised (NEO-PI-R) devel-
tions. Azmi et al. (2016) found that tax-fairness perceptions mediate oped by Costa Jr. and McCrae (1992). The original NEO-PI-R
the relationship between tax knowledge, tax complexity and voluntary scale had 240 items, which was later shortened by the authors
tax compliance. Similarly, a different set of studies (e.g., Katz & for the sake of expediency in social science research. The five
Ott, 2006; Porcano, 1988) suggest that whether taxpayers consider tax components of Big Five personality (Conscientiousness, Agreeable-
laws to be fair and less complex will have a bearing on their intentions ness, Openness, Extraversion and Neuroticism) were measured with
and likelihood of complying with tax obligations. Furthermore, Lewis 60-items (John & Srivastava, 1999). The scale was further short-
et al. (2014) found that the relationships between personality and anti- ened by Barnett et al. (2015) to 30 items which is adopted in this
social behaviour were mediated by perceptions of social support. study measured on a seven-point Likert scale (see Appendix
Hence, it may be deduced that perceptions of fairness accounts for the Table A1).
relationship between personality and intentions to act against social
norms such as obligations to pay taxes. Therefore, the current study
(Figure 1) posits that tax-fairness perceptions will mediate the relation- 4.2 | Measurement of tax non-compliance
ship between the five (5) FFM personality traits and tax non- behaviour
compliance intention, leading to the following hypotheses:
To measure tax non-compliance behaviour, the study adopted Gilligan
Hypothesis H6(a–e). Tax-fairness perception mediates and Richardson's (2005) 15-item scale to measure tax non-compli-
the relationship between personality traits (conscientious- ance. The items measure how respondents express their opinions
ness, agreeableness, openness, extraversion and neuroti- regarding certain scenarios.
cism) and tax non-compliance behaviour.

4.3 | Measurement of perceived tax-fairness

4 | RESEARCH METHOD Based on the work by Gerbing (1988) on tax-fairness perception,

Gilligan and Richardson (2005) developed a modified scale to measure
This study deploys the survey method by collecting primary data taxpayer fairness perceptions about tax policies and regulations. The
through self-administered questionnaires (Rowley, 2014). The scales current study adopted Gilligan and Richardson's (2005) 21-item scale,
used in the instrument were adopted and adapted from articles publi- which is a five-point Likert type scale with questions about fairness
shed in reputed journals. perception).

FIGURE 1 Research model

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6 of 12 JASSEM ET AL.

4.4 | Data collection process and sample size 5.1 | Demographic features of respondents

Printed survey questionnaires were distributed to taxpayers present Demographic details of the respondents are presented in Table 2. The
at the office of the Inland Revenue Board of Malaysia (IRBM) in Kuala majority of the respondents were male and working as employees in
Lumpur, Malaysia. The IRBM does not disclose taxpayers' profiles; as various organisations. The largest age group was between 31 and
a result, probability sampling was not feasible. Malaysian taxpayers 40 years category, and the majority of the respondents had university
submit their reports on the basis of self-assessment system either degrees. One extra question was added to the questionnaire seeking to
online or physically. Over several consecutive working days, visitors know why the individuals were physically visiting the tax office when
to the IRBM office were requested to fill out the questionnaire. After online self-assessment was possible. An overwhelming majority noted
distributing over 1200 questionnaires, 535 survey forms were ret- that they were either appearing for appeals related to random audits or
urned. Upon initial scrutiny of the survey forms, 32 entries were dis- to seek information on ambiguity in the tax calculation method.
carded as more than 25% of the questions were left unanswered (Hair
et al., 2013). Finally, 503 returned forms were usable for further anal-
ysis. The table developed by Krejcie and Morgan (1970) for sample 5.2 | Measurement model: Construct validity
size adequacy, indicates a minimum of 384 respondents for a large
population that is over 1 million, as in this case. Hence, sample size Tables presented in Appendix shows the outer loadings of all items for all
adequacy requirements are met. variables in the modified measurement model after deleting items with
factor loadings below the recommended benchmark of 0.5 (Byrne, 2013).
According to the results of outer loadings, all the items were retained
5 | DATA ANALYSIS except six items under the dimensions of personality. These items were
deleted from the initial measurement model due to low factor loadings
To analyse the data, SPSS (Version 23) and Smart-PLS (Version 3.2) that were lower than the recommended cut-off (<0.5), suggesting their
were utilised. The analysis was conducted in two phases. In the first low contribution to related constructs (Hair et al., 2016).
phase, SPSS was used to complete the following tasks: (i) data prep- The measures for internal consistency reliability were determined
aration (e.g., coding, checking and managing missing data, monotone through composite reliability (CR) (Gefen et al., 2000). Cronbach's Alpha
response, test for outliers, etc.); (ii) to generate demographic charac- was not reported keeping in mind some of its shortcomings suggested
teristics of the respondents; (iii) to compute frequencies, means and by scholars (McNeish, 2018). All the values of CR were above 0.7
SD of the data against each variable in the model; and (iv) to con- suggesting that internal consistency reliability requirements were met.
duct analysis for common method variance (CMV). SPSS is widely Furthermore, all the average variance extracted (AVE) values were
used by researchers for data analysis (Hair et al., 2016; Ramayah above the recommended value of AVE ≥0.50, suggesting that conver-
et al., 2018). gent validity requirements were met (Hair et al., 2016). To determine
In the second phase, partial least squares-structural equation discriminant validity both Fornell and Larcker (1981) criteria and
modelling (PLS-SEM) using Smart PLS (v.3.2) was employed to assess heterotrait-monotrait (HTMT) (Henseler et al., 2015) criteria were
construct validity and internal consistency reliability of the measure- applied. The results indicated that discriminant validity was achieved
ments and to test the hypotheses by evaluating the structural model. (Hair et al., 2016).

TABLE 2 Demographic information

Variables Category Frequency Percentage
Gender Male 403 80.1
Female 100 19.9
Age 20–30 107 21.3
31–40 217 43.2
41–50 143 28.4
51–60 31 6.0
61 and above 5 0.01
Source of primary income Employment 236 47.0
Own business 80 15.9
Property income 64 12.6
Other sources 123 24.6
Total years as taxpayer 1–5 47 9.3
6–10 160 31.7
11–15 247 49.2
15 and above 49 9.8
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JASSEM ET AL. 7 of 12

5.3 | Multicollinearity test impacted tax non-compliance intention (β = 0.111, p = 0.017). The
above results indicate that all the hypotheses were all supported,
To measure the possible influence of lateral collinearity, the variance except H-1c and H-3c both related to openness were found to be sta-
inflation factor (VIF) was computed. The study's two (2) endogenous tistically non-significant.
variables (tax-fairness perceptions and tax non-compliance intentions) The R2-values or coefficients of determination computed indi-
show the highest VIF of 1.816 indicating that the values were below cated that the combined effect of the exogenous variables explained
the cut-off of 3.3 (Diamantopoulos & Siguaw, 2006), implying that 27.3% of variation in tax non-compliance behaviour and 31.4% tax-
multicollinearity was not an issue (Hair et al., 2016). fairness perceptions.

5.4 | Structural model analysis 5.5 | Mediation analysis

The first step in assessing the significance of the relationships in the Following guidelines provided by Hair et al. (2016) to test for media-
proposed hypotheses in the path model is to utilise the bootstrapping tion, bootstrapping was done to compute the indirect effect of tax-
approach (Wong, 2013). This technique assesses the statistical signifi- fairness on the relationships between the personality traits on tax
cance of the coefficients and subsequently the error of the estimated non-compliance behaviour (Table 4). According to the results, tax-
path coefficients (Chin, 1998). The standardised path coefficients (β), fairness perception significantly mediated the relationship between
the significance of the paths, and the R2-values for the endogenous four of the FFM personality traits and tax non-compliance behaviour:
construct were determined. conscientiousness (βab = 0.080, p < 0.001), agreeableness (βab = 0.052,
The results of the bootstrapping procedure (Table 3) show that all p = 0.001), extraversion (βab = 0.031, p = 0.01) and neuroticism (βab
the paths were significant except the relationship between Openness = 0.023, p = 0.001). Only in the case of openness, it appears that
and Tax-Fairness Perception (β = 0.035, p = 0.223) and also the rela- tax-fairness perception does not mediate the relationship between
tionship between Openness and Tax Non-Compliance Intentions openness and tax non-compliance intention (βab = 0.018, p = 0.436).
(β = 0.007, p = 0.468). All the other paths were significant which Furthermore, from the values of VAF (variance accounted for), the
was also supported by the values of confidence intervals (CI) that did highest mediation effect was related to conscientiousness
not straddle a zero-value (Ramayah et al., 2018). Therefore, the rela- (VAF = 30.65%) followed by agreeableness (17.16%), which can be
tionships between conscientiousness, agreeableness, extraversion and interpreted as mediation (Hair et al., 2016).
tax-fairness perceptions were positive and significant (β = 0.411,
p < 0.001, β = 0.365, p < 0.001, β = 0.157, p = 0.001), and the rela-
tionship of these variables with tax non-compliance intention was 6 | DI SCU SSIONS , LIM I TATIONS A ND
negative and significant (β = 0.181, p < 0.001, β = 0.274, FU T U R E D I R E C T I O N S
p < 0.001, β = 0.233, p < 0.001). On the other hand, the relationship
between neuroticism and tax-fairness perception was negative and This study investigated the relationships between the FFM personal-
significant (β = 0.138, p = 0.004). Further, neuroticism positively ity traits and taxpayers' behavioural intentions regarding tax-fairness

T A B L E 3 Results of regression
PATH Β SE t value p value 95% CI
analysis (bootstrapping)
IVs to MED LB UB
CONS- > TFP 0.411 0.048 8.522 <0.001 0.332 0.493
AGREE- > TFP 0.365 0.055 4.833 <0.001 0.176 0.356
OPEN- > TFP 0.029 0.045 0.761 0.423 0.04 0.111
EXTRA- > TFP 0.157 0.05 3.112 0.001 0.072 0.238
NEUR- > TFP 0.138 0.046 2.617 0.004 0.193 0.043
MED to DV
FC- > PF 0.913 0.051 3.807 <0.001 0.107 0.278
IVs to DV
CONS- > TAXEV 0.181 0.053 3.38 <0.001 0.091 0.265
AGREE > TAXEV 0.274 0.052 5.23 <0.001 0.184 0.357
OPEN- > TAXEV 0.007 0.083 0.08 0.468 0.111 0.167
EXTRA > TAXEV 0.233 0.057 4.092 <0.001 0.131 0.32
NEUR- > TAXEV 0.111 0.052 2.122 0.017 0.196 0.025
 14791854, 2022, S1, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/pa.2777 by li bai - New York University , Wiley Online Library on [16/03/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
8 of 12 JASSEM ET AL.

T A B L E 4 Test of indirect effects

95% CI
using bootstrapping
Path a*b SE t value p value VAF% LL UL
CONS- > TFP > DV 0.080 0.022 3.673 <0.001 30.65 0.074 0.116
AGREE > TFP > DV 0.052 0.017 3.157 0.001 16.11 0.037 0.080
OPEN- > TFP > DV 0.018 0.009 0.718 0.436 – 0.005 0.013
EXTRA- > TFP > DV 0.031 0.013 2.318 0.01 11.74 0.021 0.054
NEUR- > TFP > DV 0.023 0.012 2.005 0.001 17.16 0.034 0.016

Note: IV: CONS, AGREE, OPEN, EXTRA, & NEUR represent FFM personality traits, DV: TAXEV.
Abbreviations: TAXEV, tax non-compliance (tax evasion) intention; TFP, tax-fairness perception; VAF,
variance accounted for.

perception and non-compliance intentions. The results of the study investigate the association between measures by tax authorities and
show that agreeableness, conscientiousness and extraversion all have a tax compliance by taxpayers. However, the outcome of the current
negative relationship with tax non-compliance intention. This indi- study demonstrates that the challenge related to tax avoidance, needs
cates that individuals with such dominant personality traits are more to be examined beyond economic motives. The reality is that the rea-
likely to comply with their social obligations regarding tax payments. sons for tax non-compliance by people, is not simple or straightfor-
The three referenced traits are positive and desirable human personal- ward. This study demonstrates that spotlight needed to be brought to
ity dimensions that have been found to lead to positive attitudes and the possibility that people's personality traits have a significant role in
behaviours in other contexts also. For instance, Barnett et al. (2015) their disposition regarding meeting their tax obligations.
found that individual employees with these traits showed willingness Among the limitations of this study is the fact that the data was
to embrace new technologies and had a positive desire to learn and collected from individuals who filled out information on all the variables
contribute to their jobs. Similarly, in the field of criminology, together, which exposes it to the possibility of common method bias,
Wiebe (2004) showed that experimental participants with such domi- thus a study of how the perceptions and intentions of respondents
nant traits displayed less likelihood of delinquent behaviour. Further- change over time may provide a more robust finding. In addition, con-
more, these traits appeared to have a positive impact on tax-fairness textual circumstances such as socio-economic conditions were not con-
perceptions. Hence, such individuals would harbour a positive view of sidered in this study, which may have an important role in the
tax policies and regulations, and perceive them as necessary for the perceptions and intentions of the taxpayers. Another point that may be
greater good of society. considered as scope for future research is to examine the influence of
The influence of openness on tax-fairness perception and tax both inside (e.g., zest, optimism, etc.) along with the outside personality
non-compliance intention was found to be non-significant. This result traits mentioned in this study. Finally, many other variables not consid-
also mirrors the findings of Rothmann and Coetzer (2003), which ered in this study may be at play, and hence future researchers are
showed that openness had no significant impact on job performance. encouraged to consider the role of constructs such as threat of penal-
Therefore, it may be deduced that openness to new experiences, ties, prevalence of corruption, existing social support, etc.
although a positive personality trait, does not impact perceptions and
behavioural intentions when it comes to tax obligations.
Finally, neuroticism was found to be positively associated with 7 | IMPLICATIONS
tax non-compliance intentions and negatively with tax-fairness per-
ception. The study by Benlian and Hess (2010) shows that people The findings of this study have implications for both theory and prac-
with dominant neurotic traits were resistant to organisational norms tise. First, the study enriches the existing literature on tax behaviour
and change. In their study, they found that such individuals often by providing a nuanced view of how dominant personality traits of
resisted the adoption of new technology in their workplace. Further- individuals are likely to determine their tendency for tax evasion. The
more, Dam et al. (2018) found that such individuals were more prone discovery that certain personality traits, if dominant in an individual,
to delinquent acts and anti-social behaviour. Thus taxpayers with such are likely to influence their intentions and behaviour when it comes to
dominant personality traits are likely to have negative views on the meeting tax obligations may pave the way for theory building that
fairness of the tax system and be inclined to evade taxes. connects personality to tax compliance intentions.
Numerous studies have been conducted in the past to unearth Second, from the perspective of tax authorities, it may be useful
the reasons why people try to avoid paying their tax dues. Some of knowledge that personality traits such as agreeableness, conscien-
the earlier studies such as Allingham and Sandmo (1972) have tried to tiousness and extraversion have a positive relationship with tax com-
determine taxpayer's disposition to voluntarily report their true tax lia- pliance. On the other hand, individuals with neurotic personality traits
bilities based on the possibility of facing fines if any evasive actions are more likely to be prone to tax non-compliance. Considering the
are detected. Most of the research focus in the past has been to fact that in today's age of big data analytics, organisations have gained
 14791854, 2022, S1, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/pa.2777 by li bai - New York University , Wiley Online Library on [16/03/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
JASSEM ET AL. 9 of 12

expertise in mapping people's personality types, and thus regulators OR CID

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Rothmann, S., & Coetzer, E. P. (2003). The big five personality dimensions AUTHOR BIOGRAPHIES
and job performance. The Journal of Individual Psychology, 29(1), 68–74
https://hdl.handle.net/10520/EJC88938
Rowley, J. (2014). Designing and using research questionnaires. Manage- Dr. Suaad Jassem is an Assistant Professor at Al Zahra College for
ment Research Review, 37(3), 308–330. https://doi.org/10.1108/MRR-
Women, Department of Managerial and Financial Sciences, Mus-
02-2013-0027
Saad, N. (2012). Perceptions of tax fairness and tax compliance behaviour: cat, Sultanate of Oman. She holds PhD from University of Malaya,
A comparative study. Journal Pengurusan, 36, 89–100. Department of Business and Accountancy, Kuala-Lumpur, Malay-
Saad, N. (2014). Tax knowledge, tax complexity and tax compliance: Tax- sia. She holds a Bachelor and Master's degree in science of
payers' view. Procedia-Social and Behavioral Sciences, 109, 1069–1075.
Accountancy. She has working experience in both academic and
https://doi.org/10.1016/j.sbspro.2013.12.590
Sandmo, A. (2005). The theory of tax evasion: A retrospective view. practical practice and has contributed and presented research
National Tax Journal, 58(4), 643–663. https://doi.org/10.17310/ntj. papers in international conferences. Her area of interest includes,
2012.1.02 sustainability balanced scorecard architecture, enterprise risk
Soto, C., & Jackson, J. (2013). Five-factor model of personality. In D. S.
management, managerial accounting, and decision-making. Her
Dunn (Ed.), Bibliographies in psychology (Vol. 120, pp. 238–245).
Oxford University Press. https://doi.org/10.1016/j.paid.2017.08.014
articles have been published in journals such as Sustainability,
Stajkovic, A. D., Bandura, A., Locke, E. A., Lee, D., & Sergent, K. (2018). Journal of Family Business Management and Management and
Test of three conceptual models of influence of the big five personal- Foundation of Management.
ity traits and self-efficacy on academic performance: A meta-analytic
path-analysis. Personality & Individual Differences, 120, 238–245. Yasser A. Al-Rawi is a senior lecturer at Department of Account-
https://doi.org/10.1016/j.paid.2017.08.014 ing, Administration and Economics at the University of Anbar in
Tan, L. M., & Chin-Fatt, C. (2000). The impact of tax knowledge on the per-
Iraq. Yasser is a PhD graduate from Malaysia. His research focuses
ceptions of tax fairness and attitudes towards compliance. Asian
on accounting, sustainability, and taxation. Yasser have also peer
Review of Accounting, 8(1), 44–58. https://doi.org/10.1108/eb060720
The World Bank Report (2018). OECD and World Bank call for whole-of- reviewed many articles in national, international Scopus and
government approach to combating tax evasion and corruption. Clarivate journals. Currently he is writing many articles in the
https://www.worldbank.org/en/news/press. accounting sustainability and Islamic taxation. Yasser's research
Verboon, P., & Goslinga, S. (2009). The role of fairness in tax compliance.
ID is Orcid https://orcid.org/0000-0002-3464-8863. In addition,
Netherlands Journal of Psychology, 65(4), 136–145.
Vize, C. E., Miller, J. D., & Lynam, D. R. (2018). FFM facets and their rela- WOS research ID is AAO-7632-2021.
tions with different forms of antisocial behavior: An expanded meta-
Adil Hussein Ali is an Assistant Professor at Department of
analysis. Journal of Criminal Justice, 57, 67–75. https://doi.org/10.
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APPENDIX

TABLE A1 Scale items to measure Big Five personality traits

Strongly agree = 1 Agree = 2 Slightly agree = 3 Neutral = 4 Slightly disagree = 5 Disagree = 6 Strongly disagree = 7
Factor Item Cronbach's α (reported)
Conscientiousness (as opposed to being directionless) 1. I am always prepared 0.74
2. I waste my time (reverse-coded)
3. I find it difficult to get down to work (reverse-coded)
4. I get chores done tight away
5. I carry out my plans
6. I shirk on my duties (reverse-coded)
Agreeableness (as opposed to antagonistic) 1. I have a good word for everyone 0.76
2. I get back at others (reverse-coded)
3. I make people feel at ease
4. I have a sharp tongue (reverse-coded)
5. I cut others to pieces (reverse-coded)
6. I insult people
Openness to experience (as opposed to close- 1. I believe in the importance of art 0.76
mindedness) 2. I enjoy hearing new ideas
3. I am not interested in abstract ideas (reverse-coded)
4. I do not like art (reverse-coded)
5. I do not enjoy going to art museums (reverse-coded)
Extraversion (as opposed to Introversion) 1. I would describe my experiences as somewhat dull (reverse- 0.79
coded)
2. I am skilled in handling social situations
3. I know how to captivate people
4. I have little to say (reverse-coded)
5. I don't talk a lot (reverse-coded)
6. I am the life of the party
Neuroticism (as opposed to being emotionally stable) 1. I am not easily bothered with things 0.71
2. I am often down in the dumps (reverse-coded)
3. I panic easily (reverse-coded)
4. I rarely get irritated
5. I seldom feel blue
6. I feel comfortable with myself
7. I have frequent mood swings (reverse-coded)

Source: Barnett et al. (2015)