Diversity of Motivations to Engage in Tax Evasion

Abstract

This paper identifies types of tax evaders and explores their divergent motivations for evading taxation. The data derives from two large-scale population surveys conducted in 2008 and 2012 in Hungary. Cluster analysis captured two distinct types of tax evaders: 1) poverty escape-type and 2) better-off fake entrepreneurship-type, partially confirming existing typologies. Logistic regression analysis reveals that these two groups are characterised by distinct motivations to evade taxation: the first group acts predominantly out of necessity; the second group’s choice is primarily driven by rational calculation.