1 CHAPTER 1: INTRODUCTION 1.0 Chapter ... - DSpace@UM

stated crime is an industry where market participants act to optimize their utility.Therefore, a crime will be committed if expected utility is greater than the utility thatcould be gathered if efforts were devoted elsewhere. Next paragraph will write on fiscalpsychology.2.1.2 Fiscal PsychologyAttitudes research on tax compliance was first introduced in 1959 by Schmolders.Thereafter attitude become a prevalent concept with the numerous studies which coversthe field of economics, accounting, criminal justice (decision sciences), law, psychology,sociology, ethics and taxation as discussed in the literature review in this study. This hasprovided plenty of issues and questions to understand attitude of taxpayers. Models usingthe attitudes tradition are more complex than deterrence theory models besides beingunique because it looks at compliance intentions of the taxpayer. However, according toCuccia (1992), fiscal psychology suffers from a methodological shortcoming because itfailed to identify the mechanisms through which the link exists and that economic basedcompliance research will be better at understanding taxpayer reporting. Factors underfiscal psychology which are behavioral in nature are demographic, (e.g. age, gender),perceptions of the moral of evasion, perceptions of peer compliance and fairness of thelaws. The taxpayer may not reveal the truth in the survey due to bias because one personmay perceive that underreporting is not wrong as compared to another.20