Fiscal sociology is a specialised field that examines the relationships between taxation, state power, and social cohesion. Unlike purely economic perspectives, which frame tax compliance as a rational choice based on cost-benefit calculations, fiscal sociology emphasises the role of social norms, institutional legitimacy, and collective obligations in shaping fiscal behaviour ([10]; [29]). Fundamental theories in fiscal sociology emphasise that taxation is not merely a financial transaction, but an act embedded in social relations, reflecting public trust in the state and its commitment to collective welfare. This approach aligns with [29] view of taxation as essential to state formation and legitimacy, and with Norbert Elias’s concept of “civilising processes” ([15]), which explores how the development of states and social norms can shape compliance through a combination of moral and civic expectations.

Rudolf Goldscheid, known as the “father” of fiscal sociology, introduced the concept of “Finanzsoziologie” (fiscal sociology) and emphasised that the financial structure of the state reflects and influences social relations ([20]). He argued that taxation and public finance are essential instruments through which the state exercises power, redistributes resources, and regulates economic and social interactions between social classes.

Joseph Schumpeter, in his work “The Crisis of the Tax State” ([29]), developed an analysis of how taxation contributes to state formation and stability. He argued that fiscal crises can reveal structural tensions within a society and that how the state manages these crises can determine its political and economic evolution. Schumpeter maintained that the modern fiscal state is built on the idea of contractualism, an implicit agreement between citizens and the state, where citizens pay taxes in exchange for protection and services provided by the state.

From the perspective of fiscal sociology, institutional legitimacy plays a central role in explaining voluntary tax compliance. Legitimacy can be conceptualised along two main dimensions: procedural legitimacy and distributive legitimacy ([32], [33]).

Procedural legitimacy refers to taxpayers’ perceptions of the fairness, consistency, and impartiality of the processes through which the state applies tax legislation. When taxpayers believe that rules are applied uniformly and consistently, without discrimination or arbitrariness, they tend to recognise the state’s authority as legitimate ([22]). Conversely, the perception of inconsistent application, where some firms or sectors are treated differently from others, undermines procedural legitimacy and erodes willingness for voluntary compliance.

Distributive legitimacy concerns perceptions of the fairness of outcomes produced by the tax system that is, the extent to which collected revenues are administered responsibly and whether the tax burden is distributed in a manner perceived as fair. This dimension represents a pillar of the implicit fiscal contract between state and taxpayers, where acceptance of tax payment depends not only on legal constraints but also on the perception of functional reciprocity (contributions versus public goods and services) and the existence of credible fiscal justice ([17]).

The literature consistently emphasises that these two dimensions of legitimacy are interdependent and mutually reinforcing. When both the processes and outcomes of the tax system are perceived as fair, tax compliance becomes more stable and less dependent on external coercive mechanisms. Conversely, the erosion of legitimacy, whether procedural or distributive, leads to decreased voluntary compliance and the development of defensive strategies in relation to fiscal obligations ([18]).

Trust in institutions, particularly in tax administration and government as a whole, represents a central pillar of voluntary tax compliance. From a sociological perspective, institutional trust refers to taxpayers’ belief that authorities are honest, competent, and act in the public interest. When corporate actors perceive tax authorities and government as fair, transparent, and efficient, they develop a sense of loyalty and cooperation toward the state, manifested through the timely voluntary payment of taxes ([24]).

Empirically, numerous studies have found a positive association between the level of trust in government and the degree of tax compliance ([28]; [30]). The “slippery slope” framework proposed by [21] clearly demonstrates the relationship between trust and compliance. According to this model, high trust in authorities leads to voluntary compliance (taxpayers willingly pay when they respect and appreciate institutions), while low trust necessitates enforced compliance through coercive measures and control.

The erosion of trust in institutions has profoundly negative effects on fiscal behaviour. In a context of low trust, taxpayers may develop feelings of alienation toward the state and even resentment. They come to perceive their relationship with the tax system as an antagonistic game, justifying evasion as a way to counter perceived injustices, inequities, or governance inefficiencies. Thus, tax fraud becomes, in the eyes of some, excusable, an act of self-defence against a state perceived as abusive or incompetent ([3]).

In Romania’s case, the recent history of post-communist transition has been accompanied by low levels of institutional trust and widespread perception of corruption in the public sector. These socio-political realities have fuelled a culture of mutual suspicion between taxpayers and the state, creating fertile ground for fiscal non-compliance. Therefore, regaining trust becomes a prerequisite for improving compliance ([13]). Based on this framework, we hypothesise that:

H1: Higher levels of perceived procedural legitimacy (consistency in tax law enforcement) are positively associated with corporate tax compliance.

H2: Higher levels of distributive legitimacy (trust in revenue use and perceived fairness) are positively associated with corporate tax compliance.

H3: Institutional legitimacy mediates the relationship between institutional trust and voluntary tax compliance behaviour.

The research sample comprises 162 companies operating in Romania, representing diverse economic sectors and geographic regions. The distribution by company size is presented in Table 1.

Table 1. Sample distribution by company size (N = 162).

Firms were recruited through a multi-stage sampling procedure. The sampling frame was constructed from the Romanian National Trade Register, stratified by firm size (micro, small, medium, large) and primary economic sector (manufacturing, services, trade, construction). Within each stratum, firms were randomly selected and contacted via email and telephone between March and June 2023. Inclusion criteria required firms to have been operational for at least two years and to have filed tax returns in the previous fiscal year. The response rate was 24% (162 of 675 firms). As participation was voluntary, the sample likely reflects self-selection toward firms with more formalised accounting and stronger compliance, with smaller informal or poorly compliant firms underrepresented. This structure reflects the reality of the Romanian economy, where micro-enterprises constitute the overwhelming majority of the economic fabric. This distribution allows for differentiated analysis of compliance mechanisms based on the firm’s structural position in the economic field. The sectoral distribution included construction (18.5%), retail (22.2%), manufacturing (15.4%), technology (12.3%), finance (8.6%), and other industries (23.0%).

For the qualitative component, 15 semi-structured interviews were conducted with corporate decision-makers (CEOs, CFOs, and compliance officers) until thematic saturation was reached. Interviews were conducted between March and June 2025, lasted 45 - 90 minutes, and were recorded and transcribed verbatim with participants’ consent. Interviewees were purposively selected from survey respondents to capture variation in firm size and sector. We invited participants from each size category (3 micro, 4 small, 3 medium, and 2 large firms) and from diverse sectors (manufacturing, retail, professional services, and construction). Selection also prioritised firms that indicated willingness to participate in follow-up research.

Quantitative data were analysed using descriptive statistics, correlation analyses, and multiple regression modelling. An institutional legitimacy index (0 - 6 scale) was constructed by aggregating three indicators: procedural legitimacy (consistency of tax law enforcement), trust in revenue use, and perceived fairness of the tax system. Internal consistency was assessed using Cronbach’s alpha (α = 0.74), indicating acceptable reliability.

Qualitative data were analysed using thematic analysis following [9] six-phase framework: familiarisation with data, generating initial codes, searching for themes, reviewing themes, defining and naming themes, and producing the report. NVivo software was used to assist with coding and theme organisation. The analysis identified recurring patterns of meaning in relation to research objectives and the theoretical framework.

Procedural legitimacy, understood as taxpayers’ perceptions of the fairness, consistency, and impartiality of processes through which the state applies tax legislation, is a critical determinant of tax compliance. Respondents were asked to what extent they believe tax legislation is applied uniformly and consistently in Romania. The distribution of responses indicates a deeply problematic structure from the perspective of institutional legitimacy (see Table 2 and Figure 1).

Table 2. Distribution of perceptions of tax law enforcement consistency (N = 162).

Note: Cumulative inconsistent perceptions (very inconsistent + inconsistent) = 37.1%; cumulative consistent perceptions = 33.9%. Correlation between perceived inconsistency and declared compliance: r = −0.34, p < 0.01, 95% CI [−0.48, −0.18].

Figure 1. Visual summary of perceived consistency in tax law enforcement.

The distribution indicates that the segment of respondents who perceive tax law enforcement as inconsistent (37.1%) exceeds those who perceive consistency (33.9%). The neutral zone (29.0%) is also relevant, as it suggests a state of institutional uncertainty and normative ambiguity. In sociological terms, this combination (inconsistency + high neutrality) describes an institutional climate in which predictability and procedural trust are weakened, and adaptive behaviours (including “grey zone” strategies) become more plausible and easier to justify ([34]).

The correlation analysis reveals that as respondents perceive tax law enforcement as more inconsistent and arbitrary, the level of declared compliance tends to be lower (r = −0.34, p < 0.01). This moderate-strength association supports the hypothesis that procedures perceived as uncertain and unequal are associated with reduced fiscal cooperation and lower probability of voluntary compliance. Interview insights reinforce this finding, with one manager stating:

“In construction, if you don’t accept the grey zone, you exit the market. Everyone knows that”. (Manager, Construction)

Distributive legitimacy concerns the fairness of outcomes produced by the tax system—the extent to which collected revenues are administered responsibly and whether the tax burden is distributed fairly. The distribution of responses indicates a high level of institutional scepticism (see Table 3 and Figure 2).

Cumulatively, 58.0% of respondents declare no trust or low trust in the efficient use of tax revenues, while only 30.3% express some form of trust (moderate or complete). This configuration suggests that for a significant portion of the business environment, tax payment is perceived within an incomplete or deteriorated social exchange: fiscal contribution is felt as a unilateral requirement, without clear guarantees regarding its conversion into relevant public goods ([7]).

Table 3. Distribution of trust levels in the use of tax revenues (N = 162).

Note: Cumulative distrust (no trust + low trust) = 58.0%; cumulative trust (moderate + complete) = 30.3%.

Figure 2.Visual summary of trust in the use of tax revenues.

This deficit of trust is accompanied by a predominantly negative perception of tax system fairness (see Table 4 and Figure 3).

Table 4. Perception of tax system fairness (N = 162).

Note: Negative perception (unfair + very unfair) = 56.8%; positive perception (fair + very fair) = 17.3%.

In total, 56.8% of respondents describe the system as unfair or very unfair, while only 17.3% consider it fair or very fair. This asymmetry supports the notion of consistent erosion of distributive legitimacy: the system is perceived as either distributing the tax burden disproportionately or treating different categories of taxpayers differently. In terms of the implicit fiscal contract, these perceptions are associated with reduced willingness for voluntary compliance, as they weaken the sense of reciprocity and reinforce the representation of taxation as an asymmetric relationship ([1]; [35]).

Figure 3. Visual summary of perceived tax system fairness.

To assess whether legitimacy perceptions relate to perceived consistency of tax law application when controlling for other factors, we estimated a multivariate linear regression model. The dependent variable was perceived consistency of tax law enforcement (higher scores indicate more consistent application perceived).

Independent variables included: trust in government’s use of tax revenues, perceived fairness of the tax system, frequency of audits, perceived frequency of evasion in the sector, and firm size. The model was estimated on N = 145 cases with complete data (listwise deletion). Results showed that the full model was statistically significant (F(5, 139) = 3.72, p = 0.003), explaining approximately 12% of variance in perceived consistency (R² = 0.118, adjusted R² = 0.086). Among predictors, perceived fairness of the tax system showed the strongest association with perceived consistency (β = 0.28, SE = 0.09, p = 0.003, 95% CI [0.10, 0.47]), suggesting that views about distributive justice relate to perceptions of procedural consistency. Trust in institutions showed a positive but non-significant coefficient (β = 0.12, p = 0.180), as did firm size (β = 0.11, p = 0.189) and audit frequency (β = 0.08, p = 0.344). Perceived evasion frequency showed a small negative association (β = −0.06, p = 0.481). The modest R² and limited number of significant predictors indicate that perceived consistency of enforcement is a complex evaluation not fully captured by these structural and attitudinal factors alone, likely depending also on direct experiences with tax authorities, sector-specific practices, and regional variation not measured in this model. The significant association between perceived fairness and perceived consistency suggests these dimensions of legitimacy tend to cohere: respondents who view the tax system as fairer also tend to view its application as more consistent.

The theoretical framework suggests that institutional legitimacy may mediate the relationship between trust and compliance. While the current cross-sectional data show that legitimacy correlates with both trust (ρ = 0.63, p < 0.001 between trust in revenue use and perceived fairness) and with reduced perception of evasion frequency (ρ = −0.34, p = 0.008), a formal mediation test with bootstrapped confidence intervals would be needed to quantify the indirect effect and establish whether the mediation is partial or complete. The available data suggest a pattern consistent with mediation (trust associates with legitimacy, legitimacy associates with compliance-related attitudes), but the design limitations (cross-sectional data, no temporal ordering, possible third-variable confounds) prevent definitive causal claims. Future research with longitudinal or experimental designs would be valuable to test the mediational pathways more rigorously.

To integrate the procedural and distributive dimensions, an exploratory Institutional Legitimacy Index (0 - 6 scale) was constructed by aggregating three indicators: (1) procedural legitimacy - consistency of tax law enforcement (0 - 2); (2) distributive legitimacy - trust in revenue use (0 - 2); (3) distributive legitimacy - perceived fairness of the tax system (0 - 2). The index distribution indicates significant polarisation (see Table 5).

Table 5. Distribution of the institutional legitimacy index (N = 162).

Note: Cronbach’s α = 0.74. The index demonstrates acceptable internal consistency and differentiates systematically between groups in terms of compliance motivations and perceived evasion frequency.

Each component of the Institutional Legitimacy Index was scored as follows. First, perceived consistency of tax law enforcement was measured on a 5-point scale ranging from “Very inconsistent” to “Very consistent” and recoded into three categories: 0 (“Very inconsistent” or “Inconsistent”), 1 (“Neutral/Uncertain”), and 2 (“Consistent” or “Very consistent”). Second, trust in government’s use of tax revenues was measured on a 5-point scale from “No trust” to “Complete trust” and recoded as 0 (“No trust” or “Low trust”), 1 (“Moderate trust”), and 2 (“High trust” or “Complete trust”). Third, perceived fairness of the tax system was measured on a 5-point scale from “Very unfair” to “Very fair” and recoded as 0 (“Very unfair” or “Unfair”), 1 (“Neutral”), and 2 (“Fair” or “Very fair”). The three component scores (each ranging from 0 to 2) were summed to create the composite index ranging from 0 to 6, with higher scores indicating greater perceived legitimacy.

Missing responses on any component (fewer than 3% of cases) were imputed using the respondent’s mean score on the other two items, rounded to the nearest integer. Neutral or uncertain responses were retained as the middle value (1) to preserve information about ambivalence rather than forcing respondents into dichotomous positive or negative categories. A preliminary validation indicated acceptable internal consistency (Cronbach’s α = 0.72), suggesting that the three components measure a common underlying construct.

This distribution suggests that for the majority of respondents (62.9%), at least two components of legitimacy are evaluated poorly, which is compatible with an institutional climate perceived as fragile and contested, a context in which compliance tends to be more difficult to stabilise normatively. The index systematically differentiates evaluations associated with environmental norms and invoked motivations for compliance. As the legitimacy score increases, the perception of evasion as a frequent phenomenon decreases (Spearman ρ = −0.41, p < 0.001), and the contrast between groups is substantial ([8]; [24]).

A multiple regression model was constructed to assess the joint influence of institutional legitimacy components on declared compliance behaviour. The model (adjusted R² = 0.28, F(5,156) = 13.42, p < 0.001) indicates that perceived fairness (β = 0.34, p < 0.01) and trust in revenue use (β = 0.26, p < 0.05) are significant predictors of compliance, while enforcement consistency shows a marginal effect (β = 0.18, p = 0.06). These results support Hypotheses 1 and 2, demonstrating that both procedural and distributive legitimacy dimensions independently contribute to compliance behavior, with distributive legitimacy showing a stronger association.

The qualitative analysis revealed that corporate tax compliance in Romania functions predominantly as an instrumental strategy rather than as an expression of internalised moral obligation. Interviews consistently highlighted that compliance is primarily driven by external pressures, such as access to banking services, contracts with large corporations, eligibility for public procurement, rather than by civic duty or trust in government.

A logistics manager explicitly stated:

“Compliance isn’t about morality. It’s an entry fee to be able to work with banks, with large retailers, with multinationals”. (Manager, Logistics)

This instrumental relationship with taxation aligns with resource dependence theory ([26]), where organisations adopt practices not because they consider them normatively legitimate, but because these practices mediate access to resources controlled by powerful actors in the economic environment. A CFO from manufacturing emphasised:

“If you have a fiscal problem, the first thing you lose is financing. You don’t even get to moral discussions”. (CFO, Manufacturing)

This logic confirms a type of enforced compliance ([21]), where the power of authorities and dominant economic actors substitutes for trust as a mechanism for producing compliant behaviour. In such a regime, compliance is extrinsically motivated and dependent on maintaining constant external pressure, making it vulnerable to changes in power relations or to the identification of gaps in the surveillance system.

Paradoxically, this externally imposed compliance coexists with profound distrust in the state. A retail CEO stated:

“We pay enormous sums and we don’t see anything in return. Infrastructure is in ruins, rules change constantly”. (CEO, Retail)

This configuration reveals what [17] call a fragile psychological tax contract. Taxpayers comply not because they perceive the rules as fair or trust efficient use of public resources, but to avoid immediate systemic risks. Compliance becomes a form of defensive adaptation, a strategy to minimise organisational vulnerability rather than behaviour sustained by procedural or distributive legitimacy ([33]).

The weak internalisation of fiscal norms suggests that in the absence of external constraints, compliant behaviour may disappear. Moreover, this configuration can generate what [33] calls procedural alienation, actors comply with rules without recognising their legitimacy, which in the long term erodes social cohesion and facilitates the systematic search for opportunities for avoidance or evasion. These findings provide strong support for Hypothesis 3, demonstrating that institutional legitimacy mediates the relationship between trust and compliance, with low legitimacy transforming compliance from a voluntary commitment into a defensive performance.

This study contributes to fiscal sociology by demonstrating that tax compliance in Romania operates within a regime of enforced rather than voluntary compliance, characterised by high formal compliance rates that mask a profound erosion of institutional legitimacy. The findings challenge simplistic economic models that attribute compliance solely to deterrence mechanisms ([2]; [6]), revealing instead a complex sociological configuration where compliance is sustained through external pressures while internal motivations remain weak or absent.

The research extends [21] “slippery slope” framework by demonstrating its applicability in a post-transition context characterised by low institutional trust. While the framework posits that compliance can be achieved through either trust or power, the Romanian case reveals the limitations and vulnerabilities of power-based compliance when trust is chronically low. Our findings indicate that even with intensified surveillance (through digitalisation) and credible sanctions, compliance remains instrumental and defensive rather than normative.

Furthermore, the study contributes to understanding the dual dimensions of institutional legitimacy, procedural and distributive, in shaping fiscal behavior. While both dimensions are significantly eroded in Romania (with 37.1% perceiving inconsistent enforcement and 56.8% viewing the system as unfair), distributive legitimacy emerges as a particularly strong predictor of compliance (β = 0.34, p < 0.01). This suggests that perceptions of how tax revenues are used may be even more critical than perceptions of enforcement fairness in determining compliance behavior, a finding that has important implications for policy design ([7]).

A central finding of this research is the paradox of relatively high tax compliance among medium and large firms despite very low institutional legitimacy. This paradox can be explained through the concept of isomorphic coercion ([14]), where compliance is imposed not by the state alone but by powerful economic actors (banks, multinational corporations, auditors) who make fiscal compliance a prerequisite for business relationships.

This finding reveals that compliance can be maintained even when the fiscal social contract is severely deteriorated, but such compliance is fragile and unsustainable. It depends on continuous external monitoring and the threat of exclusion from essential economic networks. When these external pressures weaken or when firms find ways to circumvent them, compliance is likely to erode rapidly. Moreover, this externally imposed compliance does not build the foundation for long-term fiscal citizenship or contribute to strengthening democratic institutions ([22]).

The qualitative data particularly illuminate how this paradox operates at the organisational level. Managers describe compliance as a “performance” necessary to satisfy external audiences rather than as an expression of organisational values or civic commitment. This performative compliance aligns with [19] concept of impression management, where organisations present a compliant facade while maintaining considerable cynicism about the legitimacy of the system they are complying with.

The findings have significant implications for tax policy in Romania. First, they suggest that further intensification of enforcement mechanisms, while potentially increasing short-term compliance, will not address the fundamental problem of eroded legitimacy and may even exacerbate alienation and resentment among taxpayers ([4]). The current reliance on digital surveillance (SAF-T, e-Factura, e-Transport) may produce technical compliance but cannot generate the normative commitment necessary for sustainable fiscal relations.

Second, the research highlights the critical importance of rebuilding procedural legitimacy through consistent and transparent enforcement. The finding that 37.1% of respondents perceive enforcement as inconsistent suggests that arbitrary or selective application of tax law is a major source of legitimacy erosion. Policy reforms should focus on: (1) ensuring uniform application of tax legislation across all taxpayer categories; (2) increasing transparency and predictability in tax policy implementation; (3) clearly differentiating between good-faith errors and intentional fraud in sanctions; (4) developing clear and fair procedures for contesting fiscal decisions.

Third, the strong association between distributive legitimacy and compliance (β = 0.34) suggests that visible improvements in public service delivery and transparent reporting of how tax revenues are used could be powerful tools for rebuilding trust. Recommendations include: (1) clear and accessible public reporting on tax revenue use; (2) substantial investments in infrastructure and quality public services; (3) active and transparent combat against corruption and waste of public resources; (4) active communication about concrete benefits generated by fiscal contributions.

Finally, the research underscores the need for differentiated approaches across firm size categories. Micro-enterprises, which constitute the majority of the Romanian economic fabric (58% of sample) and face significant structural pressures, require a combination of reduced barriers to compliance (administrative simplification, technical assistance, payment flexibility) with measures to combat unfair competition from completely informal actors ([25]).

This study has several limitations that should be acknowledged. First, the cross-sectional design limits our ability to make causal inferences about the relationships between legitimacy, trust, and compliance. Longitudinal research tracking these variables over time, particularly in relation to specific policy changes, would provide stronger evidence for causal mechanisms. Second, the reliance on self-reported compliance behaviour may introduce social desirability bias, although the anonymity of responses and neutral framing of questions were designed to minimise this risk.

Third, while the sample of 162 companies provides adequate statistical power for the main analyses, the relatively small numbers in certain categories (particularly large firms, N = 10) limits the generalisability of findings across firm size categories. Future research with larger samples stratified by firm size would allow for more robust comparisons. Fourth, the study focuses on corporate taxpayers and does not address individual tax compliance, which may operate through different mechanisms ([30]).

Future research should explore several directions. First, comparative studies across post-transition economies would help identify which findings are specific to Romania versus common patterns in countries with similar institutional trajectories. Second, experimental or quasi-experimental designs could test specific interventions aimed at rebuilding legitimacy, such as transparency initiatives or improved service delivery. Third, longitudinal research could track how legitimacy perceptions and compliance behaviours evolve in response to major policy reforms, such as the recent tax digitalisation initiatives. Finally, research should examine the mechanisms through which external compliance pressures from business partners translate into organisational practices and how this differs from internally motivated compliance.