Determinants of Tax Evasion Behavior: Empirical Evidence from Survey Data, International Business and Management, Vol. 6, No. 2, 2013, pp. 15-23 (original) (raw)

Determinants of Tax Evasion Behavior: Empirical Evidence from Survey Data

Tax revenues are major and important income sources for governments in most countries. Sufficient tax revenues make many government projects possible and help elected officials and politicians to remain in office longer if the government implements programs and projects demanded by the public. In today’s globalizing economic environments, there is increasing demand for a variety of public services and programs. However, the rate of increase in the tax revenues to finance these public services and programs falls short of the necessary public spending. The potential tax revenue of a country based on its legal or tax law is much larger than the tax revenues that are actually collected. Due to the lack of full tax compliance, government budgets are rarely balanced in most countries, and the gap between revenue and spending is increasing. The main question is why taxpayers evade taxes. To understand tax evasion, one can examine what factors cause taxpayers to evade taxes. If factors that...

Determinants of tax evasion: A cross-country investigation

Journal of International Accounting, Auditing and Taxation, 2006

The purpose of this study is to expand on the work of . Relationship between tax compliance internationally and selected determinants of tax morale. Journal of International Accounting, Auditing and Taxation, 13,[135][136][137][138][139][140][141][142][143] and systematically investigate, on a cross-country basis, many of the key determinants of tax evasion identified by Jackson and Milliron [Jackson, B. R., & Milliron, V. C. (1986). Tax compliance research: findings, problems and prospects. Journal of Accounting Literature, 5,. Based on data for 45 countries, the results of the OLS regression analysis show that non-economic determinants have the strongest impact on tax evasion. Specifically, complexity is the most important determinant of tax evasion. Other important determinants of tax evasion are education, income source, fairness and tax morale. Overall, the regression results indicate that the lower the level of complexity and the higher the level of general education, services income source, fairness and tax morale, the lower is the level of tax evasion across countries. These findings remain robust to a broad range of cross-country control variables, an alternative tax evasion measure and various interactions.

Factors that influence Tax Evasion in Australia and Turkey : A Structural Equation Model Study

2017

The tax literature indicates that many factors impact upon and influence tax evasion and noncompliant behavior. In particular it is well documented in the tax literature, that fairness of the tax system (Cowell, 1992), compliance and enforcement (Slemrod 1992) and taxpayer’s morals and ethics (Wenzel, 2003, Murphy, 2004), all play a key role in determining the level of tax evasion. In the economic literature there has been evidence of the factors which have impacted upon economic growth and the well-being of a country’s citizens. These include, the issues of rivalry amongst individuals regarding income levels, over estimation of the benefits of increased consumption and generally a level of inequality in society (Griffith (2004). These later economic factors have also influenced tax evasion behavior.

Perception of tax evasion as a crime in Turkey

The aim of this study is to investigate Turkish taxpayers’ perception of the severity of tax evasion relative to other crimes and violations. Design/methodology/approach – A questionnaire survey was administrated to 475 Turkish self-employed respondents. One sample t-test and one-way analysis of variance methods were used for data analysis. Findings – The results of the study illustrate that tax evasion ranked 10th among the 21 offences surveyed. The results indicate that the average person views tax evasion as only somewhat serious. When compared to similar white-collar crimes, it ranked less severe than accounting fraud, while it was ranked higher than violation of minimum wage laws, welfare fraud and child labor laws. The results of this paper are important as they emphasize the fact that general public do not perceive tax evasion as a serious crime. This perception, allied to lack of enforcement efforts, has created an environment where certain individuals may not be afraid of cheating on their tax return. The study also endeavors to observe whether there is a correlation between the relative severity of a crime whether a victim is involved or not. Research limitations/implications – The main limitation arises from the sampling process used. The sample was drawn from only one city of Zonguldak, Turkey. The second limitation is related to the possibility of a participant misunderstanding the questions and terminology used in the survey. The third limitation is that this study only measures perceptions of the seriousness of 21 selected offences; hence, it may not be representative of the actual crimes. Originality/value – This is an important study in relation to Turkey. This is the pioneer study of its kind which investigates the relationship between tax evasion as a crime and other offences in Turkey. Another important aspect of this study is the fact that our results indicate a close correlation with similar studies carried out in the USA.

Effect of Tax Administration Reform and Audits on Tax Evasion in Turkey

Review of Middle East Economics and Finance, 2013

In recent years, many developing countries have carried out reforms in their tax administration to increase their effciency in collecting taxes. In 2005, the tax authority in Turkey established Tax Offce Directorates (TODs) in 29 provinces for the purpose of controlling the underground economy, improving taxpayer assistance, and increasing auditing effciency. By using the panel data on province-level tax returns, my analysis answers two questions. First, I examine the effect of audits on reported income and reported tax liability. By controlling for the detectability of evasion and other socioeconomic variables, I find that audits have the same effectiveness in increasing reported income and reported tax liability. Second, I investigate the effect of establishing TODs in 29 provinces on compliance in those provinces. I find that establishing TODs had no significant effect on the compliance level of existing taxpayers while it increased the number of tax returns significantly.

An Econometric Analysis of Tax Evasion and Its Consequences on Economic Performance

Emerging Science Journal

This study aimed to estimate the extent of tax evasion in Jordan based on a currency demand methodology, the results of the time series stationarity test showed that there was a time series to be non-stationary at the same degree, and the results of the co-integration test showed the existence of co-integration between the model variables, the size of tax evasion during the period 1980–2019 was estimated using the fully modified ordinary least squares method (FM-OLS).The results showed that the average rate of tax evasion as a percentage of (GDP) amounted to 2.7%, whereas it reached 16.7% of tax revenues, After the extent of tax evasion had been estimated, its impact on some macroeconomic variables was identified through the Toda and Yamamoto causality test, This test showed that tax evasion had an impact on the general consumer price index, GDP, tax revenues, public debt, both public and private investment, and both public and private consumption, Finally the study recommends that ...

The consequences of different strategies for measuring tax evasion behavior

Journal of Economic Psychology, 1987

This paper presents a study to investigate the effect of tax strategy on tax evasion in province of Zanjan, Iran. The study selects two randomly selected populations of 100 people from Tax organization and the people who file income tax with revenue agency. The study designs a questionnaire in Likert scale to study the effects of five variables namely; promote tax culture, lack of belief in tax payment consequences, filing false tax statement, tax exemption and general culture community as independent variables on tax evasion behavior. Using regression technique, the study has determined positive and meaningful relationships between tax evasion and independent variables.

Factors that Influence the Taxpayers' Perception on the Tax Evasion

2018

Tax Evasion is an act performed by the taxpayer to alleviate their tax burden by breaching the tax laws. In this action the taxpayer ignores the formal provisions of taxation that becomes their obligation, falsify documents, or fill the data with incomplete and incorrect. The purpose of this study is to find out the factors that influence taxpayer's perception on the tax evasion, so that can be useful for academics, practitioners, and tax policy makers. Tax evasion may be influenced by factors such as tax knowledge, tax morale, tax system, tax fairness, and compliance cost. The populations in this study are individual taxpayers registered at the Primary Tax Office in East Kalimantan. Sampling technique used is purposive sampling with criteria: taxpayer person who has a freelance job as much as 100 respondents. Analysis of this research data used PLS (Partial Least Square). The result of this study indicates that: tax knowledge, tax morale, tax system, tax fairness negatively influenced the taxpayer's perception on the tax evasion. Compliance cost positively influenced the taxpayer's perception on the tax evasion. From every negative variable, tax morale has the most significant to tax evasion, followed tax knowledge, tax system, and tax fairness.

Tax Evasion: Impact of Internal and External Factors, An Individual Tax Payer Perception

2020

This study aims to determine the perception of taxpayers on tax evasion that is influenced by internal factors and external factors of taxpayers. As the locus of control theory that a person's actions are influenced by internal factors of the person himself and external factors around the person. Tax evasion is known as a factor causing the non-achievement of state revenue from taxes so far. The MSME was used as a respondent in this study because of its large number in Indonesia and grow the country's economy. The results found that ethics and understanding of taxation as internal factors have an influence on tax evasion, as well as tax justice as an external factor also has an influence on tax evasion. From a comparative analysis, internal factors have a stronger influence than external factors. This result can be used by the Directorate General of Taxes in minimizing tax evasion by fostering individual enthusiasm in complying with tax regulations.