The Effect of Ramadan on Tax Compliance: Empirical Evidence on Religiosity and Tax Morale

ABSTRACT

This study examines how religiosity and tax morale affect voluntary and enforced tax compliance by comparing Ramadan and non‐Ramadan periods in Turkiye (Isparta). Data collected from a Turkish taxpayer sample were evaluated using multiple regression analysis. The findings reveal that religiosity consistently enhances overall tax compliance; however, its positive impact on voluntary tax compliance peaks during Ramadan, whereas its influence on enforced tax compliance is significantly stronger outside this period. Conversely, although tax morale acts as a robust predictor of voluntary tax compliance, it exhibits a significant negative association with enforced tax compliance, reflecting a behavioral crowding‐out effect that becomes more pronounced during the holy month. Furthermore, the analysis identifies income as a critical socioeconomic determinant: Higher income negatively affects tax compliance, an effect that is distinctly exacerbated during Ramadan, suggesting that wealth‐based religious philanthropy may serve as a moral substitute for secular tax duties. These results demonstrate that individuals' financial behaviors are highly context‐dependent. The findings contribute to the literature by emphasizing the necessity of designing tax policies that account for cultural rituals, moral licensing, and the multidimensional nature of tax compliance.