Tax Compliance Research: an economic perspective
01 Dec 03 |
NEW ZEALAND JOURNAL OF TAXATION LAW AND POLICY
Issue: Vol 9, no 4
Pages: pp. 455 - 468
This article considers the age-old issues of tax compliance from an economic perspective. It introduces a classification of personal taxpayers by motivation and behaviour. The sources of unintentional non-compliance are then studied in some detail. They include tax law complexity, tax compliance costs and the role of tax advisers. The article then presents a brief, non-technical review of the theoretical models and empirical evidence regarding tax compliance. It is observed that while the so-called deterrence model succeeds in explaining taxpayers' compliance or non-compliance behviour, it seriously overestimates the actual level of tax evasion found in real life. An integrated approach is then sketched out. This tentative model incorporates not only the rational tax minisation feature of the deterrence model but also the altruistic motivation pioneered by Nobel Prize Laureate Gary Beckers and the costs of complying with the tax law.
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Binh is a Professor, School of Taxation & Business Law, UNSW Australia and RMIT Asia Graduate Centre, RMIT University Vietnam, and International Fellow, Tax Administration Research Centre, Exeter University-Institute for Fiscal Studies.
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03 November 2016