Abstract
Tax evasion and tax avoidance are among the most addressed topics in economic literature in recent years, as one of the most discussed issues in different countries. The research’s primary purpose is to present Albanian residents’ and taxpayers’ perceptions regarding tax evasion, tax avoidance, and tax compliance. The leading indicators used in this report, the attitude towards tax evasion and tax avoidance, rely on individual taxpayers’ perceptions and not on factual evidence such as the amount of income hidden from the tax authorities. Several studies have been done in different countries regarding the population’s perception regarding factors affecting evasion. In this paper, we investigated the following logical sequence: in the beginning, we provided an overview of the fiscal system and legislation, informal economy, and fiscal evasion in Albania. This analysis data was taken from reports from national and international organizations. After this, we analyzed data obtained from a survey issued to 387 taxpayer individuals in Albania. Our objective was to identify, using empirical analysis, factors that influence an individual’s ethical perception of tax avoidance and evasion. The statistical analyses we carried out in the paper were factor analyses and ordinal logistic linear regression analyses using the JMP statistical software. Based on the empirical research, we concluded that government policies positively correlate with taxpayers’ behavior regarding tax compliance. Among other determinants influencing tax evasion, we have evaluated that higher tax rates are an essential element. The results of the research can be helpful for governments and other policymakers’ institutions.
Highlights
At first, we need to understand that tax evasion is a very complex and dynamic phenomenon
This study aimed to determine how individual Albanian taxpayers feel about the tax system and the factors influencing tax avoidance and evasion
We have identified and analyzed four potential factors influencing tax avoidance and tax evasion during our research study: government policies acceptance: tax rates and structure, tax legislation and collection, and tax use/enforcement
Summary
We need to understand that tax evasion is a very complex and dynamic phenomenon. Feige (1990) stated that the scale and rise of unreported profits and the implicit tax difference influence the size of budget deficits, government debt, and tax reform policies This could have consequences for economic planning as the official statistics would be inaccurate. As in any other country, the inhabitants paid taxes and duties They were included in the predetermined and controlled prices of goods, services, and other commodities provided by the state sectors and the economy's cooperative sectors for rural areas. The consequences of this propaganda continued in the years of transition, making it difficult for many citizens to accept and pay tax obligations
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