Tax Rate Cuts and Tax Compliance: The Laffer Curve Revisited

Papp, Tamás K.; Takáts, Előd

doi:10.5089/9781451868692.001

Cited by 41 publications

(20 citation statements)

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“…As envisaged during the review of the tax compliance literature, self-employed persons in Ghana could be less tax compliant if there is an increase in the tax rate on their taxable incomes, but could rather declare more incomes if income tax rates are reduced. The only major study that has observed a significant positive relationship between tax rate and tax compliance was by Yitzhaki (1974) and Papp and Takáts (2008), but the current study did not support such findings. The findings of this study are also in line with the self-employed persons" awareness of the prevailing tax rates applicable to them as obtained from the descriptive analysis.…”

Section: Calculating Effect Sizescontrasting

confidence: 99%

Do economic variables still influence tax compliance intentions of self-employed persons in developing economies? Evidence from Ghana

Ntiamoah¹,

Sarpong²,

Winful³

2019

J. Account. Taxation

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The purpose of this study was to establish whether tax compliance intentions of tax-registered selfemployed persons are still influenced by economic variables instead of non-economic variables which are now at the centre stage in tax compliance research. A quantitative research design based on a survey of 453 self-employed persons randomly selected from 15 Small Taxpayers' Offices across the Greater Accra region was used. Data was analysed using the Statistical Package for Social Sciences (SPSS) version 24 software complemented with a correlation analysis and validated using multiple regression and one-way analysis of variance. Results indicate that if the Ghana Revenue Authority (GRA) conducts frequent audits on business records and activities, and imposes lower tax rates on self-employed persons, a moderate but positive effect on tax compliance could be achieved. The results also indicate that higher fines could have a moderate negative effect on tax compliance decisions. Lastly, the level of income of self-employed persons was found to have weak but positive effects on their tax compliance intentions. The overarching results from this study indicate that economic variables do have positive but moderate effects on tax compliance intentions of self-employed persons in developing economies. It was recommend that the tax administration authority should not place too much emphasis on higher fines and imposition of higher income tax rates to encourage voluntary compliance, but instead, should place more emphasis on auditing of records and returns, and engage and provide holistic support to enable self-employed persons to grow and expand their businesses.

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Section: Calculating Effect Sizescontrasting

confidence: 99%

Do economic variables still influence tax compliance intentions of self-employed persons in developing economies? Evidence from Ghana

Ntiamoah¹,

Sarpong²,

Winful³

2019

J. Account. Taxation

View full text Add to dashboard Cite

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“…In addition, more recent literature has stressed the effect of tax rates on compliance behavior. Of particular relevance in this context is the work of Sanyal, Gang, and Goswami (2000), who show how a Laffer curve may arise under informality, and Papp and Takáts (2008), who focus on the relationship of tax rates, compliance, and revenue yield. 5.…”

Section: Policy Optionsmentioning

confidence: 99%

The Inverting Pyramid: Pension Systems Facing Demographic Challenges in Europe and Central Asia

Schwarz¹,

Arias²,

Zviniene³

et al. 2014

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Some rights reserved 1 2 3 4 17 16 15 14 This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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“…Tax compliance issues are widespread and are of general interest (e.g., Papp and Takáts 2008). The IRS (2006) estimated the federal tax gap, the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time, to reach US$345 billion or 16.3% of total revenues in 2001.…”

Section: Income Tax Evasionmentioning

confidence: 99%