Revenue Enhancement through Increased Motor Fuel Tax Enforcement

1996 ◽  
Vol 1558 (1) ◽  
pp. 67-73
Author(s):  
Stephen J. Baluch
Keyword(s):  
Diesel Fuel ◽  
Tax Evasion ◽  
Motor Fuel ◽  
Tax Compliance ◽  
Fiscal Year ◽  
Federal State ◽  
Tax Enforcement ◽  
Joint Project ◽  
Tax Rate ◽  
Fuel Tax

The development of the FHWA fuel tax compliance program is described, and estimates of additional motor fuel tax revenues generated by enforcement programs are presented. Substantial revenue losses caused by motor fuel tax evasion schemes were discovered in the mid-1980s. Since 1986, the Internal Revenue Service and FHWA have worked cooperatively to reduce fuel tax evasion by supporting changes in tax collection procedures and additional enforcement resources. Since fiscal year 1990, FHWA has provided funding to supplement state and IRS fuel tax enforcement resources under the auspices of the Joint Federal/State Motor Fuel Tax Compliance Project (joint project). The Intermodal Surface Transportation Efficiency Act of 1991 provided $5 million annually through 1997 for the joint project. Enforcement activities directly contribute hundreds of millions of dollars to the Highway Trust Fund (HTF) and state transportation funds, a yield estimated at $10 to $18 per dollar spent on these programs. Furthermore, the Omnibus Budget Reconciliation Act of 1993 moved the incidence of the federal excise tax on diesel fuel to the point of removal from bulk storage at the terminal and required tax-exempt diesel fuel to be dyed. The HTF revenue from the diesel fuel tax has increased more than $1 billion in the year since these changes went into effect on January 1, 1994, net of the tax rate increases also enacted in 1993. Some $600 million to $700 million of this increase has been estimated to be the result of improved compliance.

scholarly journals Information processing in tax decisions: A MouselabWEB study on the Allingham and Sandmo model of income tax evasion

2020 ◽  
Author(s):  
Christoph Kogler ◽  
Jerome Olsen ◽  
Martin Müller ◽  
Erich Kirchler
Keyword(s):  
Tax Evasion ◽  
Information Acquisition ◽  
Income Tax ◽  
Tax Compliance ◽  
Relevant Information ◽  
Expected Value ◽  
Decision Under Uncertainty ◽  
Tax Rate ◽  
Compliance Decisions ◽  
Expected Values

The highly influential Allingham and Sandmo model of income tax evasion framed the decision whether to comply or to evade taxes as a decision under uncertainty, assuming that taxpayers are driven by utility-maximization. Accordingly, they should choose evasion over compliance if it yields a higher expected profit. We test the main assumptions of this model considering both compliance decisions and the process of information acquisition applying MouselabWEB. In an incentivized experiment, 109 participants made 24 compliance decisions with varying information presented for four within-subject factors (income, tax rate, audit probability, and fine level). Additional explicit expected value information was manipulated between-subjects. The results reveal that participants attended to all relevant information, a prerequisite for expected value like calculations. As predicted by the Allingham and Sandmo model, choices were clearly influenced by deterrence parameters. Against the assumptions, these parameters were not integrated adequately, as evasion did not increase with rising expected rate of return. More transitions between information necessary for calculating expected values did not result in higher model conformity, just as presenting explicit information on expected values. We conclude that deterrence information clearly influences tax compliance decisions in our setting, but observed deviations from the model can be attributed to failure to integrate all relevant parameters.

scholarly journals The Quality Effect of Auditing on Tax Compliance: Evidence from Tunisian Context

2022 ◽  
Vol 12 (1) ◽  
pp. 24-27
Author(s):  
Lynda Soltani
Keyword(s):  
Tax Evasion ◽  
Audit Quality ◽  
Tax Compliance ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Accounting Environment ◽  
The Subject ◽  
The Difference ◽  
The Impact ◽  
Statutory Tax Rate

Taxation is the subject of complex and evolving regulations. it has become one of the major concerns of any business to better manage its finance, the responsible for corporate governance give an importance to the fiscal in the strategy and management of the company. In recent years, the importance of taxation in the financial and accounting environment is motivated to study the impact of control and transparency of infomation affected by audit quality. We study a sample of 19 companies between 2013 and 2017, the result shows that audit quality improves tax compliance in the Tunisian context while measuring tax evasion by the difference between the statutory tax rate and the effective tax rate. This study finds that tax evasion in Tunisian firms may have decreased with better audit quality.

Taxpayer Compliance Simulation

2008 ◽  
pp. 13-25 ◽  
Author(s):  
Kim M. Bloomquist
Keyword(s):  
Economic Theory ◽  
Social Networks ◽  
Tax Evasion ◽  
Tax Compliance ◽  
Probability Of Detection ◽  
Agent Based Model ◽  
Tax Enforcement ◽  
Agent Based ◽  
Multi Agent

This chapter describes the development of a prototype multi-agent based model – the Tax Compliance Simulator (TCS) – designed to help tax administrators think about ways to reduce tax evasion. TCS allows the user to define unique behavioral, income, and tax enforcement characteristics for one or two distinctive taxpayer populations. The capabilities of the model are demonstrated in a simulation of the deterrent effects of taxpayer audits. The simulation finds that a significant portion of audit-based deterrence may depend on the influence of taxpayers’ social networks rather than the probability of detection or penalty for underreporting as indicated by economic theory (Allingham and Sandmo, 1972).

scholarly journals Tax Morale

2014 ◽  
Vol 28 (4) ◽  
pp. 149-168 ◽  
Author(s):  
Erzo F. P. Luttmer ◽  
Monica Singhal
Keyword(s):  
Tax Evasion ◽  
Tax Policy ◽  
Field Experiments ◽  
Tax Compliance ◽  
Natural Experiments ◽  
Tax Morale ◽  
Tax Rate ◽  
Key Policy ◽  
Compliance Decisions ◽  
Underlying Mechanisms

There is an apparent disconnect between much of the academic literature on tax compliance and the administration of tax policy. In the benchmark economic model, the key policy parameters affecting tax evasion are the tax rate, the detection probability, and the penalty imposed conditional on the evasion being detected. Meanwhile, tax administrators also tend to place a great deal of emphasis on the importance of improving “tax morale,” by which they generally mean increasing voluntary compliance with tax laws and creating a social norm of compliance. We will define tax morale broadly to include nonpecuniary motivations for tax compliance as well as factors that fall outside the standard, expected utility framework. Tax morale does indeed appear to be an important component of compliance decisions. We demonstrate that tax morale operates through a variety of underlying mechanisms, drawing on evidence from laboratory studies, natural experiments, and an emerging literature employing randomized field experiments. We consider the implications for tax policy and attempt to understand why recent interventions designed to improve morale, and thereby compliance, have had mixed results to date.

scholarly journals Factors affecting the corporate income tax compliance in private enterprises in Ba Ria – Vung Tau province

2021 ◽  
Vol 5 (2) ◽  
pp. first
Author(s):  
Lê Thị Bảo Như ◽  
Nguyễn Thị Thu Hảo ◽  
Nguyễn Thị Hồng Hạnh
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Linear Regression Analysis ◽  
Tax Avoidance ◽  
Tax Compliance ◽  
Corporate Income Tax ◽  
Survey Method ◽  
Private Enterprises ◽  
Tax Rate ◽  
Factors Affecting

The corporate income tax management in Vietnam in general and Ba Ria - Vung Tau province, in particular, are facing a big challenge, which is finding the means of tax sufficient collection and avoidance of tax evasion. However, tax fraud or tax avoidance has been complicated and the number of these illegal activities tends to increase. From practical requirements, this paper contributes to the gap of previous studies by identifying factors affecting the corporate income tax compliance in private enterprises in Ba Ria - Vung Tau province. By survey method and linear regression analysis, the results show that there are seven factors that affect corporate income tax compliance, including the simplicity in tax declaration, tax inspection, the fairness of tax system, tax rate, financial status, the taxpayer's knowledge, and tax administration performance. Of all factors, the tax rate factor has a negative effect and the remaining factors have a positive effect on corporate income tax compliance. Based on these results, the authors propose some solutions to encourage private enterprises to comply with the corporate income tax regulations in Ba Ria - Vung Tau province.

scholarly journals PROSPECT THEORY AND TAX COMPLIANCE: A MICROFOUNDED EQUILIBRIUM PERSPECTIVE

2019 ◽  
pp. 177-198
Author(s):  
Maria Carmela APRILE ◽  
Francesco BUSATO ◽  
Francesco GIULI ◽  
Enrico MARCHETTI
Keyword(s):  
Prospect Theory ◽  
Tax Evasion ◽  
Tax Compliance ◽  
The United States ◽  
Individual Choice ◽  
Tax Rate ◽  
Empirical Estimates ◽  
Open Questions ◽  
United States Economy ◽  
Compliance Decisions

This paper discusses the capabilities of a class of microfounded equilibrium models, augmented with Prospect Theory elements in the spirit of al- Nowaihi and Dhami (2007), to address several open questions in the analysis of tax evasion and compliance decisions. There are three main results: i) there exists a unique equilibrium with a tax evasion, consistent with the empirical estimates for the United States economy; ii) the model predicts a positive relationship between tax rate and evasion rate, while offering a solution to the so called Yitzhaki puzzle; iii) the «framing effect» plays a significant role in supporting these results; this is a distinctive characterstic of this class of model, typically not present in simple individual choice models. Furthermore, the model also allows us to investigate some potentially relevant effects of labor supply behavior on the tax compliance decisions.

scholarly journals The Impact of Tax Audit and Corruption Perception on Tax Evasion

2021 ◽  
Vol 22 (3) ◽  
pp. 1158-1173
Author(s):  
Ferry Irawan ◽  
Adam Siaga Utama
Keyword(s):  
Tax Evasion ◽  
Tax Compliance ◽  
Fixed Effect Model ◽  
Tax Enforcement ◽  
Effect Model ◽  
Panel Data Regression ◽  
Data Regression ◽  
Tax Audit ◽  
Corruption Perception ◽  
The Impact

This study is aimed to determine the impact of tax audit intensity and perception of corruption on tax evasion activities. Some research that explains the impact of tax audit on tax evasion tends to give a varied result one and another. It is reasonable to assume that there is another factor that simultaneously influences tax evasion. Tax audit and perception of corruption were chosen because of their relevance and intertwine relation in tax authorities function and program, namely tax enforcement and the eradication of corruption. This research is also in line with the challenges faced by many countries in increasing tax compliance. We conduct a panel data regression method with a fixed effect model. We found that tax audit proved insignificant to tax evasion, and perception of corruption positively significant to tax evasion. We conclude that corruption significantly increases tax evasion and undermine the benefit of tax audit

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