The Mediating Role of Attitude in Tax Compliance Intentions: Perspectives from Malaysian Gig Workers

Abstract

A relatively new phenomenon, the gig economy is distinguished by the increasing prevalence and swift dissemination of temporary as well as flexible employment opportunities where employers prefer to hire independent contractors and freelancers over full-time staff.  The proliferation of the gig economy has a substantial impact on labour relations, primarily concerning the tax obligations of independent contractors.  Such individuals must, therefore, independently accrue and pay taxes on their income.  Although extensive tax compliance studies have been conducted over the years, nonetheless, study on the tax compliance behaviour of gig workers are still scant.  Thus, the objective of this study is to investigate the influence of attitude and its decomposed factors on the intention of gig economy workers to comply with tax laws and regulations.  Using a survey method on 202 digital freelancers in Malaysia, the results indicated that moral reasoning, perceived fairness, and the adoption of online tax services had significant effects on the formation of individuals' attitudes towards intentions to comply.  Another finding was that attitude acted as a mediator between the intention to comply and the decomposed factors of attitude.  In brief, the research study offers a significant contribution by elucidating the determinants that impact the tax compliance conduct of gig workers and emphasising the critical role that attitudes play in determining intentions to comply.  The results of this study hold practical significance for policymakers, tax authorities, and practitioners who are interested in promoting increased tax compliance in the gig economy and reducing tax losses from the gig economy.