scholarly journals Tax Audit as a Significant Factor in Suppressing Tax Evasion

2017 ◽  
Vol 55 (2) ◽  
pp. 161-178
Author(s):  
Miodrag Todorović ◽  
Ivan Stanković ◽  
Samir Ljajić
Keyword(s):  
Gross Domestic Product ◽  
Informal Economy ◽  
Tax Evasion ◽  
Income Tax ◽  
Arithmetic Operations ◽  
Tax System ◽  
The Public ◽  
Descriptive Research ◽  
Tax Audit ◽  
Public Revenue

AbstractThe fact that an enormous portion of the public revenue is lost through tax evasion indicates the inevitability of taking various measures to suppress it. According to the latest statistics, the outflow from the gross domestic product through tax evasion is 30%. The aim of this paper is to point to the systematisation of the matter relating to an assessment of the efficiency of tax audit as a pillar of the reduction of tax evasion and informal economy in our country. Methodology implies a descriptive research. Collected data were meticulously analysed by means of basic arithmetic operations. Due to serious consequences of tax evasion, it is necessary to upgrade the tax system modelled on developed market economies. It is necessary to modernise a Tax Administration, as well as to improve the co-operation between its segments. A synthetic income tax should be introduced. It would encompass all revenues that a taxpayer generates per year. If all taxpayers settled their tax liabilities, it would create space for tax burden reduction. In legal states only “the bravest” resort to tax evasion. Most countries have undertaken a series of measures in order to suppress tax evasion and informal economy. However, the effectiveness of the struggle varies.

scholarly journals Impact of Lump Sum Expense Rates on Public Revenue

2015 ◽  
Vol 63 (3) ◽  
pp. 1023-1030
Author(s):  
Jana Tepperová ◽  
Jan Pavel ◽  
Lenka Láchová
Keyword(s):  
Czech Republic ◽  
Income Tax ◽  
Personal Income ◽  
Special Role ◽  
Personal Income Tax ◽  
Tax System ◽  
The Czech Republic ◽  
The Public ◽  
Lump Sum ◽  
Public Revenue

Lump sum expense has special role within the Czech tax system. As the percentages of the lump sum expense used in the Czech Republic are high compared to other EU countries, they are often criticized as distortive and government searches for ways to limit their use. On the other side, the long-standing role of the lump sum expense in the Czech tax system hinders its decrease. Based on the data from the personal income tax returns of self-employed we analyze the use of the lump sum expense in the Czech Republic over the years 2004 to 2012. Using the same data and controlling for other variables, we estimate the impact of the lump sum expenses’ rates on public revenue (personal income tax, social security and health insurance revenue). According to the results, the higher number of taxpayers using the lump sum expense does not influence the public revenue, but there is negative effect of the average portion of lump sum expense to taxable income on the public revenue.

scholarly journals Description of Fiscal Legislation and Changes in Years in Albania

2016 ◽  
Vol 4 (1) ◽  
pp. 91
Author(s):  
Edvin Xhango
Keyword(s):  
Gross Domestic Product ◽  
Informal Economy ◽  
Tax Evasion ◽  
Income Tax ◽  
Value Added ◽  
Legal Framework ◽  
Tax Law ◽  
Business Interests ◽  
The Right ◽  
The Cost

The development of the appropriate tax law was very important but also very difficult for countries coming from a centrally planned economy. In this paper, the author discusses the framework of tax law drafted from 1993 until 2014. In the study we present as the legislation has changed in these years and have influenced legal solutions to improve business data; thus affecting the development of the economy. We have identified legal definitions that provide the right solutions for business as well as for the economy of the state. We have selected the popular items and the articles that encourage business to develop informal economy. For this study is the ratio of Value Added Tax and Income tax on gross domestic product, which from 1998 until 2014 is almost the same. Noting that Albania is the country with the size of informal economy 34-47%, the result is about the legal framework of deficiencies. Given the above results, we have studying business interests to develop the informal economy. For this aid comes in the study of Busato and Chiarini, 2004, by which it can be determined the cost of product development business to the informal economy. Calculations showed that the cost of the development of the informal sector is much lower than the fiscal burden. Based on the results we conclude that the legal framework needed to improved in terms of avoidance of tax evasion opportunities as recognition of all invoiced costs, increasing penalties for not declaring the income and improve the work of the tax administration.

scholarly journals The Albanian Taxpayers’ Perception of the Current Tax System and Its Impact on Informal Economy, Tax Evasion and Tax Avoidance

2017 ◽  
Vol 8 (1) ◽  
pp. 470-477
Author(s):  
Hysen Muceku ◽  
Teuta Balliu
Keyword(s):  
Informal Economy ◽  
Tax Evasion ◽  
Tax Avoidance ◽  
Poor Performance ◽  
Tax System ◽  
Factors Affecting ◽  
The Public ◽  
Fiscal System ◽  
Main Factors ◽  
Fiscal Administration

Abstract Tax revenues constitute the main source of public expenditure financing. The main problem that the public finances in Albania are facing today is the lack of public revenue to the level that the execution of the public spending requires. This is the result of a still high level of informal economy, tax evasion and tax avoidance. The reforms undertaken by the Albanian governments in the past two decades in order to manage the main factors of the informal economy, tax evasion, and tax avoidance have not had the expected results. Poor performance of the fiscal administration agencies has allowed fiscal policies and strategies approved by governments not to be implemented, thus creating a lot of problems and difficulties with an impact on the reduction of the efficiency of the fiscal system. This paper deals with the perception of the Albanian taxpayer for the current tax system in Albania. It also deals with its impact on the informal economy, tax evasion and tax avoidance. It analyses the main factors affecting the informal economy, tax evasion and tax avoidance, and the perception that Albanian taxpayers have for the current fiscal system. A fiscal system must be effective and perceived as fair in order to encourage voluntary payment of taxes thus bringing increased revenue, reduction of informality, tax evasion and tax avoidance. In order to realize this paper we used questionnaires with focused taxpayers, explaining the techniques of collecting, interpreting and analyzing the data. The paper concludes with the main conclusions of how Albanian taxpayers perceive the current tax system. It also provides recommendations for improving the current fiscal system based on the perception of taxpayers.

scholarly journals The Role of Tax Audit in Reducing the Phenomenon of Tax Evasion and its Reflection on Tax Revenues

2018 ◽  
Vol 4 (4) ◽  
pp. 27
Author(s):  
Othman Abdulqader Hama Amin
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Applied Research ◽  
Tax System ◽  
Tax Revenues ◽  
Tax Audit ◽  
The Relationship

The purpose of this research is to explain the reality of tax auditing in reducing the phenomenon of tax evasion, by highlighting the most important reasons and factors that help in tax evasion.This research was carried out on a sample of companies operating in Iraq, which is an applied research based on the data of the General Authority for Taxation of these companies. The study concluded that the reasons for evasion of taxes are due to lack of tax awareness and lack of trust between taxpayers and the tax department, Thus enhancing the risk of tax evasion.The study recommended that: 1. Increase confidence between the tax department and taxpayers, and as a result, reduce tax evasion. 2. The necessity of this research lies in the development of a strategy for the tax system and the provision of a kind of equality between taxpayers and the tax department, which increases revenues, and gives credibility to the relationship between taxpayers and the income tax authority.

scholarly journals Does the Tax System Reduce Tax Evasion in Light of the Governance Mechanisms? Evidence From Jordan

2021 ◽  
Vol 12 (2) ◽  
pp. 99
Author(s):  
Ashraf Bataineh
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Social Impact ◽  
Positive Impact ◽  
Governance Mechanisms ◽  
Official Statistics ◽  
Tax System ◽  
Study Results ◽  
The Impact ◽  
Awareness Level

This study aims to measure the impact of tax system elements on reducing the tax evasion, in light of the governance mechanisms in Jordan. The study sample consists of (140) tax auditors at the Jordanian Income tax and sales department, and to achieve the study objectives the researcher designed a questionnaire and distributed it on the study sample members. Study results show that elements of the tax system (tax legislations, tax administration, and Taxpayer) have a positive impact on reducing the tax evasion, in light of governance mechanisms. study recommends the need to raise the tax awareness level among members of the Taxpayer, work to reduce the continuation of making adjustments on tax laws and legislation, and give a sufficient period of time to ensure that desired economic and social impact being achieved from these adjustments, with the need to announce the official statistics of tax evasion’s figures and ratios, because the unofficial statistics on tax evasion have been tarnished by some exaggeration where work should concentrate on increasing penalties of tax evaders.

Tax Expenditure and Public Expenditure in the UK

1986 ◽  
Vol 15 (1) ◽  
pp. 23-49 ◽  
Author(s):  
Margaret Wilkinson
Keyword(s):  
Income Tax ◽  
Public Expenditure ◽  
Personal Income ◽  
Public Expenditures ◽  
Personal Income Tax ◽  
Tax System ◽  
Tax Expenditures ◽  
Tax Expenditure ◽  
Public Revenue ◽  
The Uk

ABSTRACT‘Tax expenditures’ are public revenue losses which result from special allowances and reliefs given to various categories of taxpayer for reasons of economic and social policy. In 1983/4 tax expenditures in the personal income tax system cost nearly £11 billion which was equal to 35 per cent of revenue from personal income tax or 9 per cent of total public expenditure. This paper assesses their significance in the context of public expenditure and tax policy. It identifies those allowances and reliefs in the personal income tax system which may be regarded as tax expenditures, evaluates them and compares their cost with direct expenditures in similar areas. Many tax expenditures are inequitable and inefficient; and they are difficult for governments to control. If they were reduced some public expenditures could be protected from cuts, or the general burden of income tax could be reduced.

scholarly journals Personal Income Tax Compliance at the Regional Level: The Role of Persistence, Neighborhood, and Decentralization

2020 ◽  
pp. 016001762094281
Author(s):  
Julio López-Laborda ◽  
Jaime Vallés-Giménez ◽  
Anabel Zárate-Marco
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Fiscal Decentralization ◽  
Tax Compliance ◽  
Personal Income ◽  
Extensive Literature ◽  
Personal Income Tax ◽  
Institutional Variables ◽  
The Public ◽  
The Individual

This article quantifies personal income tax compliance by regions for the first time in Spain and identifies the factors explaining differences in tax compliance between regions, an aspect that has scarcely been analyzed in the literature. To this end, and in addition to the dynamic and spatial components considered by Alm and Yunus, this article considers the variables included in the classical tax evasion model of Allingham and Sandmo, as well as tax morale and political-institutional variables, including those linked to the country’s fiscal decentralization. The results obtained confirm, on one hand, those reached in the very extensive literature studying tax evasion from the individual perspective (including the importance of the dynamic element) and, on the other, the relevance of the spatial component in explaining tax compliance, so that greater or lesser tax compliance is partly explained by factors such as the tax behavior of neighbors or how those neighbors are treated by the public sector.

scholarly journals Measurement of Effectiveness of Personal Income Tax in the Tax System of the Czech Republic

2014 ◽  
Vol 62 (2) ◽  
pp. 307-314 ◽  
Author(s):  
Břetislav Andrlík
Keyword(s):  
Czech Republic ◽  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Public Budget ◽  
Tax System ◽  
The Czech Republic ◽  
The Public ◽  
Administrative Costs ◽  
The World

This article deals with the issues of effectiveness of personal income tax in the Czech Republic. The personal income tax in the Czech Republic, referred to as the tax on income of natural persons, represents a significant part of the public budget revenue (23.35% of all tax revenues in 2012). One of the principles of a good tax system is the principle of its effectiveness. The effectiveness of a particular tax is measured by various methods. The theory distinguishes between two types of costs expended on the collection of taxes, i. e. administrative costs (direct or indirect) and excessive tax burden. In the case of direct administrative costs the measurement compares the total volume of a particular tax revenue with the costs of its collection. The amount of the tax levied is thus not a net income of the public budget, due to the fact that it must be reduced by the costs of the public sector which are necessary for obtaining such amount. In this contribution we shall focus on the measurement of direct administrative costs. The measurement of effectiveness of income tax on natural persons is performed with the use of the full-time equivalent (FTE) method, which is based on the classification of revenue authorities staff according to their jobs and on the determination of conversion coefficients in order to identify costs related to the collection of a particular tax. A separate part of the article deals with measurements of tax system effectiveness in the international scope. We cite an important international study, "Paying Taxes 2013: The Global Picture", annually prepared by the World Bank and PricewaterhouseCoopers, which analyses demands of tax systems in different countries of the world.

scholarly journals Evaluation of tax audit strategies

2013 ◽  
pp. 52-59
Author(s):  
Gintarė Giriūnienė ◽  
Raminta Benetytė
Keyword(s):  
Informal Economy ◽  
Tax Evasion ◽  
Tax Avoidance ◽  
Additional Information ◽  
Increased Risk ◽  
Verification Time ◽  
Tax Audit ◽  
Point Line ◽  
A Company ◽  
Plane Point

It should be noted that the tax audit topic is relevant – during the last years quantity of tax audits accomplished by state authorities is still growing. Especially in this way is attempted to combat against tax avoidance and evasion, informal economy prevailed in the country. For committing it only helps to have regular inspections of taxpayers i.e. tax audits. Tax audits are divided under the verification time, as it is classified into a complex, a thematic inspection and an operational check. However, despite the existing differences between the various types of tax audit, a key moment of choosing strategy is a tax audit organization. In practice there are distinguished two tax audit strategies – “line-plane-point“ and “point-line-plane“. The first one indicates that before the initial analysis of data examination, it is necessary to investigate whether the company's tax accounting does not have indications for increased risk of error existence. For its practical application is necessary to execute a thorough collection and analysis of the evidence, and the most important is objective and correct assessment of indicators for an increased risk of errors. For this purpose suspicious taxpayers usually are selected and under the tax audit all of the data that can distort selected dubious indicators are checked. In application of the second strategy, if the execution of a company is suspected of tax evasion, it will be forwarded to the additional tax audit services, which will continue the investigation and will explore the additional information. Accomplished practical research have shown that the more of these indicators are observed during initial tax audit stage, the “point-line-plane“ method is more likely to be chosen. Accordingly, to choose one or another tax strategy correctly and adapt it properly it is necessary to take into account the indicators linked to the need for a tax audit.

scholarly journals O ICMS-Ecológico: Critérios Legais

2012 ◽  
Vol 7 (1) ◽  
Author(s):  
Matheus Linck Bassani
Keyword(s):  
Income Tax ◽  
Environmental Law ◽  
Environmental Tax ◽  
The Public ◽  
Qualitative And Quantitative ◽  
Legal Standards ◽  
Critical Situation ◽  
Federal Constitution ◽  
Public Revenue ◽  
To Receive

Resumo: O presente trabalho tem como objetivo verificar a aplicação do ICMS-Ecológico, que se constitui numa forma de repartição da receita oriunda da receita proveniente da arrecadação do Imposto sobre Circulação de Mercadorias e Serviços (ICMS), como forma de incentivo à proteção ambiental. Situado na Seção VI, do Capítulo I da Constituição Federal, o tema da repartição das receitas tributárias é abordado como ramo do direito financeiro. A forma de repartição das receitas tributárias, com enfoque para a repartição do produto arrecadado pelos Estados decorrente do ICMS é analisada, bem como algumas considerações acerca desse imposto. Analisa-se e discute-se a relação entre a Constituição Federal e o meio ambiente, visando a verificar a viabilidade de instituição de um imposto ambiental, salientando os princípios da extrafiscalidade e o da não-vinculação da receita. Por fim, o tema do ICMS-Ecológico é tratado como uma solução imediata para a urgência ambiental, analisando-se seus critérios quantitativos e qualitativos para estimular os municípios a receberem parte da receita a ser repassada pelos Estados. Palavras-chave: ICMS-Ecológico; Repartição de Receita; Meio-Ambiente; Imposto Ambiental; Critérios legais. Abstract: The purpose of this study is to promote the discussion about the possibility of stimulate the environmental protection by distribution of Services and Merchandises Traffic Income Tax – ICMS – motivated by the critical situation of our environmental, which claims urgent measures for stopping its degradation. The income distribution as a financial law, described into the Brazilian Federal Constitution, is a very important question treated in this paper. After these first points, the ICMS is analyzed, bringing its characteristics. Aspects of environmental law and the Brazilian Constitution are discussed, to establish an environmental tax, beyond the extrafiscal and non-binding public revenue principles. Finally, this paper finds the Ecological ICMS theme as an immediate solution, analyzing its qualitative and quantitative standards to stimulate the cities to receive part of the public revenue distributed by the States. Keywords: Ecological-ICMS; Distribution of Revenue; Environment; Environmental Tax; Legal standards.

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