Tax Compliance Behavior Among Gig Economy Workers in Developing Countries: The Interplay of Tax Morale, Institutional Trust, and Digital Tax Administration

Abstract

The rapid expansion of digital platform-mediated gig work has created a structurally novel compliance challenge for tax administrations in developing countries, as millions of self-employed individuals earning income through ride-hailing, freelance, delivery, and domestic services platforms generate taxable income that falls largely outside the third-party withholding frameworks that anchor compliance in formal employment. This study investigates the determinants of voluntary tax compliance behavior among gig economy workers in Mexico, Morocco, and Bangladesh, integrating the Slippery Slope Framework of  Kirchler  with tax morale theory and behavioral public finance to develop a model in which institutional trust, perceived power of authority, tax morale, and digital tax administration quality jointly determine compliance behavior. Using a vignette-based survey experiment administered to 541 active gig workers, supplemented by 32 in-depth interviews, the study employs ordered logistic regression and structural equation modeling to estimate the relative effects of voluntary and enforced compliance pathways. Results indicate that tax morale exerts the strongest effect on compliance intention (beta = 0.52, p < 0.001), followed by trust in tax authority (beta = 0.38, p < 0.001), digital tax administration quality (beta = 0.34, p < 0.001), and perceived audit probability (beta = 0.27, p < 0.01). Income transparency, generated by digital platform payment records, moderates the compliance-intention-behavior gap. Country-level institutional environment significantly moderates all structural relationships. The study contributes to the behavioral tax compliance literature and offers targeted recommendations for revenue authorities seeking to extend the fiscal reach of digital taxation to the growing gig workforce.