Stopping Tax Evasion: Detection Probability Vs Moral Persuasion

10.13007/679 ◽  
2017 ◽  
Keyword(s):  
Tax Evasion ◽  
Detection Probability ◽  
Moral Persuasion

scholarly journals Sustainable Consumer Tax Evasion Theory under Information Inattention

2021 ◽  
Vol 13 (2) ◽  
pp. 562
Author(s):  
Bodo Herzog
Keyword(s):  
Public Policy ◽  
Tax Evasion ◽  
Detection Probability ◽  
Policy Instruments ◽  
Tax Rates ◽  
Policy Debate ◽  
Income Levels ◽  
Theory Of Information ◽  
Financial Penalty ◽  
Public Policy Debate

This article studies the renewed interest surrounding sustainable public finance and the topic of tax evasion as well as the new theory of information inattention. Extending a model of tax evasion with the notion of inattention reveals novel findings about policy instruments that can be used to mitigate tax evasion. We show that the attention parameters regarding tax rates, financial penalty schemes and income levels are as important as the level of the detection probability and the financial penalty incurred. Thus, our theory recommends the enhancement of sustainability in public policy, particularly in tax policy. Consequently, the paper contributes both to the academic and public policy debate.

scholarly journals You’ve Got Mail: A Randomized Field Experiment on Tax Evasion

2020 ◽  
Vol 66 (7) ◽  
pp. 2801-2819 ◽  
Author(s):  
Kristina M. Bott ◽  
Alexander W. Cappelen ◽  
Erik Ø. Sørensen ◽  
Bertil Tungodden
Keyword(s):  
Behavioral Economics ◽  
Field Experiment ◽  
Tax Evasion ◽  
Detection Probability ◽  
Large Scale ◽  
Tax Compliance ◽  
Extensive Margin ◽  
Long Term Effects ◽  
Randomized Field Experiment

We report from a large-scale randomized field experiment conducted on a unique sample of more than 15,000 taxpayers in Norway who were likely to have misreported their foreign income. By randomly manipulating a letter from the tax authorities, we cleanly identify that moral suasion and the perceived detection probability play a crucial role in shaping taxpayer behavior. The moral letter mainly works on the intensive margin, while the detection letter has a strong effect on the extensive margin. We further show that only the detection letter has long-term effects on tax compliance. This paper was accepted by Yan Chen, behavioral economics.

scholarly journals Consumers as Tax Auditors

2019 ◽  
Vol 109 (9) ◽  
pp. 3031-3072 ◽  
Author(s):  
Joana Naritomi
Keyword(s):  
Tax Evasion ◽  
Detection Probability ◽  
Sao Paulo ◽  
Third Party ◽  
Tax Revenue ◽  
Fixed Costs ◽  
Whistle Blowing ◽  
Behavioral Biases ◽  
Verification System ◽  
Enforcement Value

To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and establishes a verification system to aid whistle-blowing consumers in São Paulo, Brazil (Nota Fiscal Paulista). Firms reported sales increased by at least 21 percent over 4 years. The results are consistent with fixed costs of concealing collusion, increased detection probability from whistle-blower threats, and with behavioral biases associated with lotteries amplifying the enforcement value of the program. Although firms increased reported expenses, tax revenue net of rewards increased by 9.3 percent. (JEL D22, H25, H26, L25, O14, O17)

scholarly journals Weak Enforcement, Strong Deterrence: Dialogues with Chinese Lawyers About Tax Evasion and Compliance

2016 ◽  
Vol 41 (02) ◽  
pp. 288-310 ◽  
Author(s):  
Benjamin van Rooij
Keyword(s):  
Social Norms ◽  
Tax Evasion ◽  
Perceived Risk ◽  
Detection Probability ◽  
The State ◽  
Multiple Sources ◽  
High Level ◽  
Severity Of Punishment

This article analyzes why Chinese lawyers report a high level of perceived deterrence in relation to tax evasion even though enforcement is weak. It finds that deterrence here originates from multiple sources, most directly through clients and more distantly through the firm and the state. Lawyers have highly contextual notions of detection probability and a vague understanding of sanction severity unfitting of the high deterrence found here. In the cases studied, deterrence arises out of a general fear lawyers have of state authorities and clients, as well as through personal morals and social norms in their firms. This shows a broader and deeper approach to deterrence, beyond certainty and severity of punishment for the violation studied, one in which the general perceived risk of such violation is central, whatever its source.

A Question of Censorship: Science or Moral Persuasion?

1977 ◽  
Vol 22 (8) ◽  
pp. 579-580
Author(s):  
CHRIS B. PASCAL
Keyword(s):  
Moral Persuasion

Pengaruh Konvergensi International Financial Reporting Standards (Ifrs) Terhadap Penghindaran Pajak(Tax Avoidance)

2018 ◽  
Vol 26 (2) ◽  
pp. 158-169
Author(s):  
Umi Wahidah ◽  
Sri Ayem
Keyword(s):  
Financial Reporting ◽  
Tax Evasion ◽  
Stock Exchange ◽  
Control Variable ◽  
Tax Avoidance ◽  
Sampling Technique ◽  
International Financial Reporting Standards ◽  
Reporting Standards ◽  
Control Variables ◽  
Financial Reporting Standards

This research aimed to examine the effect of the convergence of International Financial Reporting Standards (IFRS) on tax avoidance on companies listed in Indonesia Stock Exchange. Tax avoidance that used in this research was Cash Efective Tax Rate (CETR). This research is also use the control variable to get other different influence that different such as CSR, size, and earning management (EM. This research used populations sector of transport service companies that listed in Indonesia Stock Exchange. The data of this research taken from secondary data that was from the Indonesia Stock Exchange in the form of Indonesian Capital Market Directory (ICMD) and the annual report of the company 2011-2015. The method of collecting sample was purposive sampling technique, the population that to be sampling in this research was populations that has the criteria of a particular sample. Companies that has the criteria of the research sample as many as 78 companies. The method of analysis used in this research is multiple regression analysis. Based on regression testing shows that the convergence of International Financial Reporting Standards (IFRS) has a positiveand significant impact on tax evasion. This shows that IFRS convergence actually improves tax evasion practices. The control variables of firm size and earnings management also significantly influence the application of IFRS in improving tax avoidance practices, while CSR control variables have no role in convergence IFRS in improving tax evasion practice.

SENSITIVITAS ETIS MAHASISWA ATAS PENGGELAPAN PAJAK

2017 ◽  
Vol 8 (2) ◽  
pp. 178-195
Author(s):  
Nurma Risa
Keyword(s):  
Tax Evasion ◽  
Female Students ◽  
T Test ◽  
Study Program ◽  
Male And Female ◽  
Political Sciences ◽  
Significant Difference ◽  
The Subject ◽  
And Gender ◽  
Management Students

This study aims to prove that there is a difference of perception about ethics on tax evasion in UNISMA Bekasi students, based on selected study program and gender. The sample of this research is the students who have fulfilled the subject of taxation, at the Faculty of Economics (FE) and Faculty of Social and Political Sciences (FISIP). Using independent t-test, the results showed that there was no significant difference of perception about tax evasion ethics between FE and FISIP students. But significant differences the perception of tax evasion ethics occur between accounting and management students at FE. Significant differences also did not occur between male and female students

Well-being and inequality in comparative perspective: the case of Poland and Ukraine

2019 ◽  
pp. 32-55
Author(s):  
Natalia Kovalisko ◽  
Serhii Makeev
Keyword(s):  
Tax Evasion ◽  
Shadow Economy ◽  
Free Market ◽  
Well Being ◽  
Household Surveys ◽  
Cheap Labour ◽  
Catching Up ◽  
Public Opinion Polls ◽  
Opinion Polls

Socio-economic trajectories of Poland and Ukraine have been considerably diverging since the last decade of the 20th century. The former has been advancing and catching up with Western European countries in terms of the quality of life — whereas in Ukraine, the 1990s recession gave way to unsustainable economic growth, which interrupted in the second half of the 2000s and in the 2010s. The comparison of official statistics, along with the data of household surveys and public opinion polls, makes it possible to conclude that a progressive and sustainable transition from a command economy to free market, as exemplified by Poland, is accompanied by moderate deepening of economic inequality. However, an abnormal transition (deviating from the “Polish rule”) entails excessive concentration of wealth and gives rise to corruption as a mechanism of income redistribution among different categories of population. This also results in a more noticeable stratification of opportunies for meeting vital and existential needs. Owing to a large proportion of shadow economy and undeclared work, Ukrainians remain a source of cheap labour in both the domestic and international labour markets; in addition, a persistent subculture of tax evasion is being formed in this country.

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