Honest Taxpayers Research Articles

Theoretical foundations of voluntary tax compliance: evidence from a developing country

Tax non-compliance is a persistent problem that is becoming increasingly common worldwide. The main objective of this study is to examine the factors that influence voluntary tax compliance among large taxpayers in Ethiopia based on the theoretical foundation of tax compliance. This study used an ordinary logit regression model, a closed-ended questionnaire with 1550 taxpayers, and quantitative data analysis. The regression analysis shows that tax compliance behavior is positively and significantly influenced by government trust, taxpayers’ tax knowledge, tax system fairness, and rewards. However, compliance costs negatively and significantly affect tax compliance. To improve voluntary tax compliance, the government and tax authorities need to be more open and responsible. They must also increase tax awareness among taxpayers through websites, seminars, and the media. Ultimately, they must reduce compliance costs and deliver tangible and intangible benefits to honest taxpayers.

СУТНІСНО-АНАЛІТИЧНІ ХАРАКТЕРИСТИКИ ПОДАТКОВОГО БОРГУ В УКРАЇНІ

The substantiation of the essential content and the identification of trends in the growth/decrease of the tax debt is relevant in all countries of the world, since it cannot be completely eradicated in any country in the world, therefore one or another measures are taken to reduce it (voluntary and forced). For Ukraine, the question of the existence of tax debt is particularly relevant, as its volume increases annually. The article is devoted to deepening the theoretical foundations of the tax debt, highlighting its essential characteristics, as well as conducting an analysis of the tax debt in Ukraine and determining the reasons for its growth. The specificity of the scientific tasks, which are the subject of the research, required the use of a complex of special methods, the application of which helped to analyze the essence of the tax debt, to isolate its specific characteristics, and to conduct an analysis of its dynamics and structure in Ukraine. The article considers approaches to the interpretation of the content of tax debt. The first approach is based on domestic legislation, national accounting standards and the inevitable onset of liability for violation of tax discipline. The second approach is based on the behavior of the taxpayer, who makes a conscious decision to not pay his tax liability and takes responsibility for the violation of tax legislation in the form of fines and penalties. The author's definition of tax debt is proposed, which not only defines its content, but also contains the reasons and consequences of its existence. The essential characteristics of the tax debt, which relate to the non-fulfillment of the tax obligation by taxpayers, the reasons and results of its non-fulfilment, the need to agree on the monetary obligations of taxpayers, as well as the consequences of the existence of a tax debt for all participants in tax relations, are substantiated. As a result of the conducted analysis, it was established that in recent years in Ukraine, despite the constant improvement of tax legislation and the simplification of tax administration procedures, tax debt continues to accumulate. It was established that in order to reduce the amount of tax debt, it is necessary to carry out various measures of influence on taxpayers by the controlling bodies. For honest taxpayers, it is worth applying incentive measures in the form of exemption from tax audits for a certain period, and for dishonest taxpayers who have a tax debt, it is advisable to increase the responsibility for committing an offense.

Tax Administration Reform: End of Tax Disputes in India?

A long-due Indian direct tax administrative reform for removing the taxpayers’ plight and widening the tax base gained momentum by introducing the faceless assessments and appeals scheme coupled with taxpayers’ tax charter. Following a descriptive approach, the study assesses whether the reform would end the tax disputes. Albeit, ideally, any tax system should be simple, efficient, transparent, and free from conflicts. The Indian taxation saga indicates an infamous tug-of-war between the taxpayers and the revenue-seeking tax officers. Serving strange tax demand notices and retrospective amendments of the tax laws created a phobia of ‘tax terrorism’ in honest taxpayers’ minds. Considering this, the government followed the digital route with no physical interaction between the taxpayers and tax officers for tax assessments and appeals. Moreover, fixing the responsibilities of the taxpayers and tax officers would minimize tax disputes substantially if addressing the apprehensions and teething problems appropriately, addressing the apprehensions and teething problems.

TAX MANAGEMENT POLICIES OF INTERNATIONAL COMPANIES OF THE UZBEKISTAN

Ensuring the necessary level of collection of taxes and other mandatory payments in the Republic of Uzbekistan, organizing the activities of large taxpayers, implementing tax administration of taxpayers and mutual cooperation on fulfilling tax obligations special attention is being paid to the fundamental improvement of service and technical service. In the Address of the President of the Republic of Uzbekistan Sh.M. Mirziyoyev to the Oliy Majlis on December 28, 2018, "One should be interested in paying taxes on time, not evading them." The new version of the Tax Code should encourage honest and honest taxpayers, who are the backbone of the country's development, and punish those who work in secret. "It is necessary to introduce the same fair tax regime for everyone at the expense of reducing the tax burden, it is necessary to gradually cancel tax benefits" as one of the important tasks in this regard.

Consequences of Money Laundering and Persisting Losses of the Country: A Reference of Bangladesh

Money laundering is a multidisciplinary issue that has gained prominence since the late 1980s. The word "laundering" literally means "to wash" or "to remove dirt." It's been characterized as the transformation of illegal proceeds into assets that can't be linked to the original crime. Money is frequently transferred from one sector to another, and the same money is frequently transferred to another sector in such a way that it is challenging to identify the source. As a result, law enforcement is unable to identify the illicit source. This means through the transaction cycle; money laundering is the process of legalizing black money or transferring the amounts as lawful revenue while hiding the source of the money received. The objective of the study is to have a thorough understanding of the money laundering scenario and how it affects the domestic and global economy, assess the money laundering challenges facing financial institutions, and offer strategic methods for financial institutions to mitigate the risks. Bangladesh is a victim of money laundering and other forms of financial crime. In many ways, the competent authority provides additional opportunities to whiten money. This study first identifies the necessity of anti-money laundering for public and private banks and non-bank financial institutions operating in Bangladesh. The major finding is recurrent amnesties harm corruption and money laundering in Bangladesh. Corruption and money laundering in Bangladesh are projected to decrease if this report adopts recommendations. This will ensure fairness in society in many ways, such as prohibiting criminal activity and will help to prepare sustainable development programs and their achievement and allow honest taxpayers to purchase properties on an equal footing. Bangladesh's government should cooperate with other nations to combat money laundering and constantly upgrade its methods for enforcing laws and regulations.

DAVLAT SOLIQ XIZMATI ORGANLARI FAOLIYATINI RAQAMLASHTIRISHNING HUQUQIY MEXANIZMLARINI TAKOMILLASHTIRISH MASALALARI

This article is based on the fact that the issues of gradual reduction of the tax burden, simplification of the tax system and improvement of tax administration, rapid development of the country’s economy, improving investment attractiveness and legal regulation of these relations are becoming increasingly global and actual. The facts are analyzed that the need to improve tax legislation and tax practices in line with the development of tax administration and the development of the investment climate by sharply reducing the tax burden on businesses, creating a fair and transparent tax system for all taxpayers and bringing it into line with international standards and simplifying tax administration, extensive systematic work is carried out to eliminate inconsistencies and contradictions in the legislation and to strengthen the protection of the rights and legitimate interests of honest taxpayers. Theoretical and practical aspects of the importance of legal regulation of issues related to ensuring the rights of subjects of tax law, the introduction of “smart regulation” models in this area and increasing the share of information technology in this sphere, the development of new effective mechanisms are researched. It is analyzed that it is important to improve the tax administration, introduce paperless document exchange and address the challenges of developing and implementing software aimed at increasing the efficiency of state tax service. Analyzing the main directions of improvement of tax administration in Uzbekistan, proposals were developed to improve its legal basis.

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Book Review

Tax Evasion Dynamics via Ising Model Spin <i>S</i> = 1

In this work, we study the problem of tax evasion on Erdös Rènyi random graphs. Here, we consider that the agents may be in three different states, namely honest tax payers, tax evaders, and undecided that are individuals in an intermediate class among honests and evaders. Every individual can change his/her state following an Ising model dynamics with spin S = 1. In addition, we consider the punishment rules of the Zaklan econophysics model, for which there is a probability Pa of an audit each agent is subject to in every period and a length of time k detected tax evaders remain honest. The dynamic of temporal evolution of the Zaklan model was studied initially via the equilibrium Ising model with two opinions (-1 and +1), and recently via a non-equilibrium three-state kinetic agent-based model on a fully-connected population. Here, through Monte Carlo simulations, we study the problem of the tax evasion fluctuations using an Ising model with spin S = 1 (-1, 0, and +1) on Erdös Rènyi random graphs in the dynamic of the temporal evolution of the Zaklan model. Then, we found that the Ising model with spin S = 1 is as efficient as the Ising model and non-equilibrium three-state kinetic agent-based model in controlling the tax evasion fluctuations. This control is even better when we use strong punishment values k even for low audit probabilities Pa.

A Fiscal Policy Foresight Tax Model, Shadow Economy Reduction, and E-Payment Institutionalization as a Result of Knowledge Management

Foresight is the key for the economy, the business environment, and by extension society and politics to face various risks under conditions of uncertainty, which is becoming the norm as we progress through the 21st century. This paper proposes a wealth-based income tax model with an obligatory electronic transaction legal framework to advance fiscal knowledge management in Greek government. The research was conducted using an online questionnaire that was distributed to Greek tax payers via the snowball method. Linear regression was used to examine the associations between the variables. The research results provide insight into the factors driving the enhancement of tax revenue collection via artificial intelligence software after the widespread adoption of e-transactions. A fiscal tax e-payment reform policy based on an artificially intelligent tax foresight model succeeds in reducing income disparities caused by overtaxing honest taxpayers, thereby shrinking the shadow economy. With the widespread adoption of e-payments and complete digitization of financial transactions, the results of this study can serve as a foundation for the advancement of fiscal knowledge management and compliance with tax behavior. This study emphasizes the importance of planning ahead for taxes and coordinating information in order to reform fiscal policy for the better.

A simple mechanism leading to first-order phase transitions in a model of tax evasion

In this work, we study a dynamics of tax evasion. We considered a fully-connected population divided in three compartments, namely honest tax payers, tax evaders and susceptibles, a class that is composed by honest tax payers that can become evaders. We consider a contagion model where the transitions among the compartments are governed by probabilities. Such probabilities represent the possible interactions among the individuals, as well as the government fiscalization. We show by analytical and numerical calculations that the emergence of tax evaders in the population is associated with an active-absorbing nonequilibrium first-order phase transition. In the absorbing phase, only honest tax payers survive in the steady states of the model, and we observe a coexistence of the three subpopulations in the active phase.

Analisis Perbandingan Tax Amnesty Jilid I dan Jilid II (Program Pengungkapan Sukarela) Serta Peluang Keberhasilannya

The government has implemented the tax amnesty volume I in July 2016 and ended in March 2017. In early 2022, the government will plan to implement the tax amnesty volume II, which was introduced as the Voluntary Disclosure Program (PPS). This program refers to the Tax Harmonization Law Number 7 of 2021. Although the results obtained during the tax amnesty volume, I did not meet the target, in 2022 the government still plans to implement the tax amnesty volume II. For this reason, it is necessary to analyze the difference between the tax amnesty volume I and the tax amnesty volume II (PPS), as well as predict its effectiveness if this tax amnesty will be implemented later. This study method focuses on a comparative qualitative descriptive method in which data collection is carried out by taking from the library, website, law and articles discussing this tax amnesty. The results obtained are that there are fundamental differences between tax amnesty I and tax amnesty II. The differences are found in the data, rates, and tax subjects. For taxpayers who have participated in the 2016 tax amnesty volume I, the tariff charged is cheaper than those who do not participate in the first volume I tax amnesty and there are restrictions on subjects who may participate in the second tax amnesty. The effectiveness of this second volume of tax amnesty is predicted to be successful with a record that socialization must be maximal, there is no perception that the tax amnesty endangers honest taxpayers, and the view of taxpayers that this tax amnesty is the last tax amnesty so that there is a fear of not paying taxes and being subject to fines.

CОЛИҚ МАДАНИЯТИНИ ЮКCАЛТИРИШ CОЛИҚ ИНТИЗОМИНИ ТАЪМИНЛАШНИНГ МУҲИМ ЭЛЕМЕНТ

This article covers the issues of legal regulations of taxation system, its simplification, improvement of tax discipline and increase of investment attractiveness, which acquire more and more global and topical character. The article analyzes the ongoing large-scale systemic work on strengthening tax discipline, forming a tax culture, creating a fair, transparent tax system for all taxpayers and bringing it in line with international standards, simplifying tax administration, eliminating contradictions and inconsistencies in tax legislation, strengthening the protection of the rights and legitimate interests of honest taxpayers. Moreover, there were studied the theoretical and practical aspects of the importance of legal regulation of issues related to the development of new effective mechanisms for ensuring compliance with tax discipline on the part of tax entities, as well as issues of relations arising between them. In addition, this research paper emphasizes the importance of improving tax discipline, further enhancement of the tax culture in order to introduce paperless document management, and solving problems of development and implementation of software products aimed at improving the efficiency of relations between the state tax service and taxpayers. By analyzing the main directions of ensuring tax discipline in Uzbekistan, proposals for improving the legislative framework were developed.

Corruption and tax revenues: Evidence from Italian regions

AbstractThis paper investigates the impact of corruption on tax revenues. Drawing on Italian regional data that distinguish between corruption crimes in which public officers play an active role (active corruption) and crimes in which there is collusion between the public officers and their private counterparts (passive corruption), the paper shows that only active corruption harms tax revenues. We argue that active corruption alters the incentives for honest taxpayers, leading to inefficiencies and a greater distance between citizens and public authorities, because it generates uncooperative public administration and reduces the perceived fairness of public systems. The estimates confirm the hypothesis and the results call for greater attention to be paid to the quality of public administration.

Investigating the relationship between tax culture and tax communication in Kazakhstan

The study demonstrated the level of tax culture as the basis for tax compliance. In turn, the formation of a strong tax culture depended on certain factors. Therefore, there were statements that the degree of such a culture depends on the level of tax communication. To show this connection, this paper analyzed the content of text arrays and products of communicative correspondence by keywords income and asset declaration in the Google search system (content analysis). Results of the analysis demonstrated more than 160 news articles and numerous social media posts. Moreover, the study contains the analytics of social media powered by YouScan artificial intelligence platform. This paper also presents the analysis and results of the sociological survey, in which more than a thousand people participated in the two biggest cities in Kazakhstan. The data of the survey were analyzed by the software Statistica 10 – the statistical data analysis system. The survey showed low tax awareness of citizens, almost 72% of respondents did not know about the introduction of the declaration of income and welfare. The results obviously demonstrated that there is a positive correlation between investigated issues, and poor utilization of information and communications technology by the government. In this way, this paper explored the relationship between tax culture and tax communication, where the awareness of citizens could be a huge step in the formation of honest taxpayers and increase confidence in government institutions.

Rewarding Good Taxpayers, an Effective Mechanism?

In this paper, I examine the conditions under which rewarding honest taxpayers is an optimal mechanism to reduce tax evasion and improve collection. My theoretical model suggests that when it is expensive to audit contributors, and moral (or pecuniary) evasion cost is high enough, rewarding tax compliance is an effective strategy to increase collection. I provide empirical evidence from Argentina’s province variation of rewards policies and tax collection. Where the data suggests that theoretical conditions hold, I find a positive effect in real estate per capita tax collection between 0.4 and more than 2 standard deviations.

Are Your Tax Problems an Opportunity Not to Pay Taxes? Evidence From a Randomized Survey Experiment

Taxpayers often view tax rules and filing processes as complicated. In this paper I study whether the perceived tax uncertainty among peers leads to a reduction of voluntary tax compliance. I find strong supportive evidence for this hypothesis using a survey experiment for a large representative sample of the German population. Providing randomized information that others are uncertain about how to file their taxable income decreases individual tax morale. This suggests that subjects use negative peer signals as an excuse in order to opt-out of tax compliance. Studying related heterogeneous treatment effects, I find that both older and left-wing subjects are more responsive to tax uncertainty of others. I also show persistent treatment effects among very honest taxpayers in a follow-up survey.

Barriers to energy sustainability: A case study from Ukraine

Sustainability goals imply not only economic and environmental components, but also a social one. The energy business around the world is profitable and economically viable, but it does not always bring appropriate benefits to a society. Besides, some governments, instead of protecting the interests of the population, turn a blind eye and generate injustice in relation to some parts of society in collaboration with energy companies. This paper examines one of the cases when the authorities pursue an unfair policy and contribute to the growth of inequality in society through regulating the natural gas tariffs. The paper considers a case of natural gas consumption and its unfair taxation by the Ukrainian government, which the authors called “gas tax”. A statistical analysis of this case revealed that honest middle-income taxpayers (middle class) are at the most disadvantageous position because they have to pay for utilities at the highest price. The paper also discusses a number of challenges and ethical issues related to the payment of gas tax. All these challenges should become arguments for revising the gas tax, making it less painful for the people and fair.

Social Norms Moderate the Effect of Tax System on Tax Evasion: Evidence from a Large-Scale Survey Experiment

In this study, we reconcile conflicting findings from the extant literature on the impact of tax system parameters on tax noncompliance. We argue that social norms play a role of heuristics facilitating tax payers’ response to the instrumental incentives posed by the systemic parameters, such as tax rate and penalties for evasion, and thus moderate the effect of those parameters on willingness to evade taxes. Relying on a unique survey experiment conducted in fourteen countries of Central-Eastern Europe, we demonstrate two types of a conditioning effect of norms. First, the impact of tax rates on respondents’ propensity for tax evasion is moderated by the perceived norms of the society at large (descriptive norms). In particular, an increasing tax rate lowers the probability of evasion as long as one views “most others” as honest taxpayers, which highlights the importance of equitability (fairness) concerns for tax compliance decisions. In contrast, the impact of punishment is moderated by the perceived norms of one’s immediate reference group (subjective norms). Strong subjective compliance norms tend to effectively replace penalties as a mechanism discouraging tax evasion, suggesting that the deterrent effect of a penalty can be entirely suppressed when subjective norms are strong. These findings have important implications for the understanding of tax compliance decisions under different formal and informal regimes.

Vergi Aflarına Yönelik Mükellef Görüşleri ve Sosyo-Ekonomik Faktörlere İlişkin Bir Analiz

Vergi afları, gelişmiş ve gelişmekte olan ülkelerde hükümetlerin sıklıkla başvurduğu bir uygulamadır. Ülkemizde sık sık vergi affı uygulamasına gidilmektedir. Mükelleflerin vergi affına ilişkin görüşlerini birçok faktörün yanı sıra sosyoekonomik faktörler de etkilemektedir. Bu çalışmada sosyoekonomik faktörlerin mükelleflerin vergi aflarına ilişkin görüşleri açısından önemi ortaya konmaya çalışılmaktadır. Çalışmada sosyoekonomik faktörler çalışmanın kısıtları çerçevesinde yaş, cinsiyet, eğitim ve kazanç aralıkları itibariyle ele alınmıştır. Kolayda örnekleme yöntemi ile 2017 yılında Bursa ilinde vergi mükelleflerine 754 anket uygulanmış veriler elde edilmiştir. Yapılan ki-kare analizi sonucunda ‘Vergi afları sonrasında, mükelleflerin daha sıkı gözetim ve denetim altında tutulmaları vergiye uyumu arttırır’, ‘Vergi afları dürüst mükelleflerde cezalandırıldıkları algısını yaratır’ ve ‘Vergi afları kayıt dışı işlemleri vergi sistemine dâhil ederek vergi tabanını genişletir’ önermeleri ile eğitim, kazanç aralığı değişkenleri arasında anlamlı bir ilişki bulunmuştur. Buna karşın yaş ve cinsiyet değişkenleri ile anlamlı bir ilişki bulunamamıştır. Diğer bir deyişle sosyoekonomik faktörler vergi affına ilişkin görüşler açısından önemlidir ve vergi affına ilişkin görüşlerde farklılıklar yaratır.

Information and analytical review of tax revenues from import operations

The importance of tax regulation of foreign economic activity is analyzed in this paper. The dynamics and structure of tax revenues to the State Budget of Ukraine are analyzed as well. Comparative analysis of VAT revenues from goods (works, services) produced in Ukraine and imported into its customs territory is carried out. The relationship between imports and VAT receipts of and excise duty on imported goods is determined. The dynamics and structure of excise duty revenues and import duties are investigated. The factors influencing the change of indicators of tax revenues from import operations are determined. Fiscal efficiency and taxes elasticity coefficient levied on imports are calculated. The regulatory role of special duties types (compensatory, special, anti-dumping), which are collected in order to protect the national producer and consumer is proved. Monitoring of additional customs receipts is carried out as a result of customs value correction by customs authorities. The preconditions and factors influencing the change in the volume of taxes on import transactions are identified. The necessity of improving the mechanism of collecting taxes on import operations is substantiated. It is proposed to reduce VAT rates, which depend on goods saturation in domestic market. Proposal to introduce the reduction factor to the duty rates used in order to stimulate critical and socially significant imports, as well as to investment goods imported into the customs territory of Ukraine is put forward. It seems that the tax policy in terms of import operations should be aimed at ensuring the rational commodity and geographical structure of imports, promoting domestic products competitiveness strengthening and protection domestic market and domestic producers. It is proposed to improve the mechanism of tax administration, which primarily involves focusing on working with dishonest taxpayers, exposing tax evasion schemes, providing appropriate tax collection services to honest taxpayers.