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This paper aims to investigate whether culture has an impact on justifications for tax cheating, and if there is, indeed, a rationale for justifying this behavior.

World surveys (V201) were used to measure justifications for tax cheating in 39 countries. Hofstede’s culture dimensions were used as a measurement scale for the relevant cultural aspects that could have an impact on tax cheating.

The results show that individualism and power distance increase the justification, while masculinity and uncertainty avoidance decrease the justification for tax cheating. Accordingly, when budgeting for tax revenues, governments need to consider the cultural dimension in their risk assessments for tax evasion.

The findings of this research provide some implications for legislators and policymakers. For example, they need to give more consideration to their respective society’s cultural dimensions and to the structure of their communities when they are imposing taxes. Legislators need to put more effort toward convincing people why it is necessary to impose and/or increase certain taxes, how society benefits directly and indirectly and why action needs to be taken when these taxes are not paid.

This paper aims to explore how the role of the perception of good public governance reduces tax evasion (TE). Besides, this study investigates whether the nexus of public governance and TE differs between developed and developing economies.

Apart from the ordinary least squares (OLS) model, this study uses the linear mixed modeling technique. The World Governance Indicators and the multiple causes estimation (MIMIC) method are used to measure public governance. The shadow economy is used as a proxy for TE.

The results show that people's perceptions of public governance and the quality of government institutions are core elements that influence tax-evasion behavior. Besides, the rule of law (RoL) and political stability (PS) significantly impact tax-evasion behavior in developing countries. Nevertheless, the RoL, the control of corruption and PS are the most critical tax-evasion determinants among public governance indicators for developed countries. Regulatory quality shows a substantial positive relationship with TE in developed but not developing countries.

This paper provides a guide for policymakers on reducing tax-evasion behavior by paying more attention to maintaining the RoL and PS and fighting corruption. Additionally, this study highlights the importance of people's perceptions of the government's pursuit of the above policy-related improvements, which, in turn, affect their tax behavior.

To the best of the authors’ knowledge, this study is the first to explore the role of people's perceptions of improvements in public governance and how this can reduce TE behavior in developed and developing economies. Unlike prior studies, this study used the linear mixed model method, which is more advantageous than OLS and produces robust estimators.