Resistance from taxpayers
Taxes are widely perceived to be unfair. Taxpayers see few tangible benefits in
return for the taxes they pay. Virtually no development activities are undertaken
through councils’ financial sponsorship, and even the existing capacities are not
producing the expected services due to lack of operation and maintenance funds
(Semboja and Therkildsen, 1992). The deterioration and in some cases nonexistence
of public services heighten taxpayers’ perceptions of exploitation from
an unequal contract with government, and this promotes tax resistance (Fjeldstad
and Semboja, 1998). Although most taxpayers are unable to assess the exact value
of what they receive from the government in return for taxes paid, it can be argued
that they have general impressions concerning their terms of trade with the
government.18 In this context, it can be assumed that taxpayers’ behaviour is
influenced by their satisfaction or lack of satisfaction with the terms of trade with
government (Levi, 1988). Thus, if the system of taxes is perceived to be unjust,
tax resistance may be considered as an attempt by the taxpayers to adjust their
terms of trade with the government.