The Theoretical Foundations of Voluntary Tax Compliance: Ordinary Logit Regression Model Application

Abstract Tax non-compliance is a persistent problem that is becoming increasingly common worldwide. The main objective of the study is to examine the factors that influence voluntary tax compliance among large taxpayers in Ethiopia, based on the theoretical foundation of tax compliance. This study used an ordinary logit regression model, a closed-ended questionnaire with 1,550 large taxpayers, and quantitative data research analysis methods. Regression analysis shows that tax compliance behavior is positively and significantly influenced by government trust, taxpayers' tax knowledge, tax system fairness, and rewards. However, the level of tax compliance is negatively and significantly affected by compliance costs. To improve the level of voluntary tax compliance, the government and tax authorities need to be more open and responsible. They must also increase tax awareness among taxpayers through websites, seminars and media. Ultimately, they must reduce compliance costs and deliver both tangible and intangible benefits to honest taxpayers.