Tax Evasion Indices and Profiles

Rizzi, Dino

doi:10.1177/1091142117691602

Cited by 5 publications

(3 citation statements)

References 28 publications

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“…In general, tax evasion existed when a taxpayer intentionally distorts his actual condition to reduce tax liability. Tax evasion is measured using unpaid tax, undeclared income or unreported tax return (Rizzi, 2017). In order to combat this illegal behavior, the government can use a deterrence-based model or a non-deterrence-based model.…”

Section: Tax Evasion Deterrence Approach and Hypothesesmentioning

confidence: 99%

Is deterrence approach effective in combating tax evasion? A meta-analysis

Dularif

Sutrisno

Nurkholis

et al. 2019

Problems and Perspectives in Management

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The purpose of this paper is to present the results of a meta-analysis of the relationship between determinant factors and tax evasion based on deterrence approach. Using the meta-analysis method, each statistical result of empirical studies is converted into r-pearson as standardized effect size, and then synthesized into a mean effect size in order to increase power and to resolve uncertainty. Theoretically, increasing audit, tax rate and tax penalty will decrease tax evasion. However, the results show that only tax rate has a significant impact on tax evasion. Synthesizing totally 478 outcomes from articles published between 1978 and 2018, there is a robust conclusion that decreasing tax rate is an effective tool in combating tax evasion. On the other hand, audit and penalty are not significant in influencing tax evasion. In addition, the results of heterogeneity analysis suggest that national culture and income level of the country are useful in explaining the impact of audit, tax rate and tax penalty on tax evasion. These findings should be of interest to policymakers. First, instead of sacrificing more resources in conducting audit or imposing more penalty, tax authorities should consider setting the tax rate as low as possible to diminish tax evasion. Second, considering that culture and income level influence the impact of audit and penalty on tax evasion, policymakers should consider national cultural values and income level condition when designing audit techniques and setting penalty structures.

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Section: Tax Evasion Deterrence Approach and Hypothesesmentioning

confidence: 99%

Is deterrence approach effective in combating tax evasion? A meta-analysis

Dularif

Sutrisno

Nurkholis

et al. 2019

Problems and Perspectives in Management

View full text Add to dashboard Cite

show abstract

“…Tax experiments, theoretical approaches to tax evasion and non-compliance as well as computerized numerical agent-based tax compliance modeling (sometimes in combination with public goods provision) make use of payment and / or utility functions often with origins in the Allingham-Sandmo approach (see Zelmer, 2003;Hokamp, 2013;Robbins and Kiser, 2018, and Alm and Malezieux, 2021, for meta-analyses and literature reviews). Rizzi (2017) presents indices and profiles for tax evasion without discussing utility functions in detail. Hence, the leading open questions for this work are: (i) which properties should utility functions have to be in line with the Allingham-Sandmo approach for tax evasion and non-compliance and (ii) how to build such Allingham-Sandmo-Functions (ASFs).…”

Section: Introductionmentioning

confidence: 99%

How to Build Utility Functions for Becker's Economics-of-Crime Theory: Allingham-Sandmo's Example of Tax Evasion and Non-Compliance Extended

Hokamp¹

2022

Journal of Computations &Amp; Modelling

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Allingham and Sandmo (J. Public Econ., 1972) analyze by the example of tax evasion and non-compliance the intended underreporting of taxpayers via concave and twice differentiable utility functions within Becker's economics-of-crime theory (J. Political Econ., 1968) on behavioral aspects of illicit activities. This work is concerned with how to build feasible utility functions applicable for experiments, theoretical investigations and / or numerical simulations of any kind of such illicit activities. It turns out that feasible utility functions form a set of Allingham-Sandmo-Functions applicable for Risk Averse and Neutral Taxpayers (ASFRANT) which is a non-commutative semiring with left-annihilating zero and unity. JEL classification numbers: C02, H26. Keywords: Agent-based Modeling, Expected Utility, Semiring, Tax Evasion.

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“…This financial development-economic growth nexus has attracted substantial attention in the literature on economic and financial development. However, to date, a limited number of studies on the effects of financial intermediary developments including of 16 information sharing and bank penetration on the unofficial economic activity or the shadow economy, have been conducted (Rizzi 2017;Ly and Vo 2014). Examining this economic and financial relationship is essential as the shadow economy is a substantial problem in emerging markets.…”

Section: Introductionmentioning

confidence: 99%

Information Sharing, Bank Penetration and Tax Evasion in Emerging Markets

Nguyen

et al. 2020

Risks

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Tax evasion, which is typically considered an illegal activity, is a critical problem and is considered a barrier to economic growth. A review of the literature shows that tax and social security contributions, regulations, public sector services, the quality of institutions and tax compliance, play important roles in determining the degree to which firms attempt to evade taxes. Measuring tax evasion is problematic due to data requirements and inadequacies. Few tax evasion indices have been estimated but it appears that they cannot be used for international comparisons across countries. This important issue has largely been ignored in the literature, in particular for emerging markets. Consequently, this paper is conducted to develop a new tax evasion index (TEI) using the most substantial and recent data from the standardized World Bank Enterprises Survey 2006–2017. In addition, using the newly developed TEI, the paper examines the importance and contribution of information sharing and bank penetration to the degree of tax evasion in emerging markets. The paper uses a sample of 112 emerging markets from 2006–2017 and the Tobit model in estimation. The empirical findings from the paper indicate that the average TEI during the 2006–2017 period for emerging markets is 0.62, with a range of (0.25, 0.75). In addition, we find that information sharing and bank penetration negatively affect the degree of tax evasion, as proxied by the TEI, in emerging markets. The empirical results also confirm the view that large firms are considered to have adopted good tax compliance practices, while firms located in remote areas are more likely to evade taxes. Policy implications have emerged on the basis of the empirical findings from the paper.

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Tax Evasion Indices and Profiles

Cited by 5 publications

References 28 publications

Is deterrence approach effective in combating tax evasion? A meta-analysis

Is deterrence approach effective in combating tax evasion? A meta-analysis

How to Build Utility Functions for Becker's Economics-of-Crime Theory: Allingham-Sandmo's Example of Tax Evasion and Non-Compliance Extended

Information Sharing, Bank Penetration and Tax Evasion in Emerging Markets

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