Enforced versus voluntary tax compliance: The “slippery slope” framework

Tax Reform and Noncompliance in Indonesia

“…Thus, mutual trust between the tax authority and taxpayers would lead to a synergistic tax climate where taxpayers are treated with courtesy and respect, since the tax authority trusts that taxpayers pay their taxes honestly. In return, the taxpayers would be willing to pay their fair share of taxes since they trust that the tax authority is benevolent and works beneficially for the common good (Kirchler, Hoelzl, & Wahl, 2008). Prior research, based on national and international surveys, found that tax compliance was positively related to trust in the tax authority (Torgler, 2003;Torgler & Schneider, 2005).…”

Predictive analytics and the targeting of audits

“…The magnitude of the psychic cost can re ‡ect an individual's attitude towards compliance. Attitudes are an important feature of psychological theories of tax compliance (Kirchler et al, 2008;Weigel et al, 1987). The psychic cost can also be interpreted as the loss of the payo¤ from following a social norm for honest tax payment.…”

Unemployment, tax evasion and the slippery slope framework

“…Although the "original" slippery slope framework (Kirchler et al, 2008a;2008b) adopts an individual perspective (individual tax payers), modelling trust in tax authorities as a determinant of tax evasion makes sense even for small firms. Also, it is relevant for (the managers of) large or midsized firms.…”

“…The 'slippery slope' framework stresses the crucial interaction of power and trust (Kirchler et al, 2008a;2008b;Muehlbacher and Kirchler, 2010). Indeed, empirical analysis shows that trust and power positively influence tax payments; in particular, trust increases and power decreases voluntary compliance, whereas power increases and trust decreases enforced compliance (Wahl, Kastlunger and Kirchler, 2010).…”

“…The "slippery slope" framework was born in the field of Economic Psychology to explain the high level of tax compliance rather than the high level of tax evasion, thus highlighting that: a) some tax compliance is voluntary and depends on trust in tax authorities; b) the standard mechanism of enforced compliance (monitoring probability and expected penalty) 1 alone can not explain the overall tax compliance (Kirchler, 2007;Kirchler et al, 2008a;2008b;Muehlbacher and Kirchler, 2010). 2 This theoretical work captures the importance of the interaction of power and trust for tax compliance.…”