Tax evasion and corruption: endogenous deterrence and the perverse effects of fines

2011 ◽  
pp. 31-53
Author(s):  
Antonio Acconcia ◽  
Marcello D'Amato ◽  
Riccardo Martina
Keyword(s):  
Tax Evasion ◽  
Public Officials ◽  
Tax Collection ◽  
The Government

We consider a simple economy where self interested taxpayers have incentives to evade taxes and to escape sanctions by bribing public officials in charge of tax collection. However, tax collectors may be monitored by second-level inspectors whose incentives to exert detection activity are endogenously determined. In this framework, it is shown that the effects of classical deterrence instruments, such as fines, may be perverse; in particular, larger fines for corruption directly reduce corruption and indirectly reduce incentives to monitor it determining, as an overall effect, an increase in the underlying offence, that is tax evasion. Nevertheless, on the normative side, we show that, even if the Government cannot commit to a given level of deterrence, the maximal fine principle still holds.

scholarly journals Assessing the effect of the COVID-19 pandemic on the government revenues: a study on individual taxpayers of Bangladesh

2020 ◽  
pp. 154-159
Author(s):  
M. R Islam ◽  
S Suraiya ◽  
N. M Zayed ◽  
K. B. M. R Hasan ◽  
M. S Bipasha ◽  
...  
Keyword(s):  
Tax Evasion ◽  
Research Result ◽  
Sampling Technique ◽  
Mean Value ◽  
Government Revenue ◽  
Tax Collection ◽  
Revenue Collection ◽  
Regressive Tax ◽  
The Rich ◽  
The Government

Purpose. The purpose of the study includes analyzing the effects of the Coronavirus pandemic on the taxpaying ability of individual taxpayers of Bangladesh and its subsequent impact on the government revenue collection; analyzing the factors related to the taxpaying ability like the situation of their employer, regularity of payment and so on; suggestions to the policy makers. Methodology. In this study purposive random sampling technique was followed to choose the respondents. The sample of the research includes the individuals who are within the tax net and have to pay income tax to the government. 128 respondents participated in the survey spontaneously. Mean value, standard deviation and related statistical tools were used for analyzing the data in the research. SPSS software was used for analyzing and interpreting the research result. Statistical tables were used to display the outcome. Findings. The major findings of the study suggest that 65.6% of the respondents said that their official activities have been affected much while other 25% claimed that their activities have become moderately affected due to the COVID-19 pandemic. Income of 40.6% of the respondents has already been much affected and income of 32.8% of the respondents has been moderately affected. The study warns that due to the detrimental effects of the COVID-19 pandemic on the income level, the governments tax collection may fall. Originality. The study concludes that the adverse effects of the COVID-19 pandemic will negatively affect the government revenue collection and to tackle this situation a less regressive tax system is suggested which will allow shifting tax liability to the rich taxpayers. The study emphases the implementation of the existing tax laws so that tax evasion is minimized. Practical value. The study has recommended some specific recommendations that may help the respective authority in tackling the ongoing coronavirus pandemic. The study suggested making some necessary adjustments in the public expenditure to reduce the pressure on tax collection. It might be beneficial to the government to manage the COVID-19 pandemic if the recommendations of the study are taken into consideration.

scholarly journals The Reliance on Lifestyle Audits for Public Officials to Curb Corruption and Tax Evasion in Nigeria

2021 ◽  
Vol 24 ◽  
pp. 1-38
Author(s):  
Oyesola Animashaun ◽  
Howard Chitimira
Keyword(s):  
Tax Evasion ◽  
Code Of Conduct ◽  
Economic Policies ◽  
Public Officials ◽  
Policy Makers ◽  
Reporting Framework ◽  
Financial Crimes ◽  
Inland Revenue ◽  
The Government ◽  
Tax Reporting

Widespread corruption in the Nigerian public service is having a far-reaching detrimental effect on the economy. Public officers and other policy makers that formulate socio-economic policies are the main perpetrators of corruption in Nigeria. This article focusses on the viability of lifestyle audits for public officials as a strategy for combating such corruption, the proceeds of which are usually laundered and warehoused either offshore or in Nigeria with the assistance of professionals such as bankers and lawyers. If such warehoused wealth is discovered it is usually forfeited to the treasury of the government of Nigeria, after the trial of the offenders. This article interrogates the adequacy of the relevant legislation and the efficacy of the statutory bodies responsible for lifestyle audits in Nigeria, such as the Code of Conduct Bureau, which is discussed, as are the Code of Conduct Bureau and Tribunal Act, 2010, the Economic and Financial Crimes Commission Act, 2004, and the income tax reporting framework administered by the Federal Inland Revenue Service. It appears that the provisions relating to lifestyle audits under the Nigerian statutes are not robust enough to curb corruption and tax evasion. In addition, the enforcement of such lifestyle audits is hindered by the immunity granted to certain Nigerian public officers and jurisdictional conflicts in prosecuting corruption cases.

ENSURING EFFECTIVE ACTIVITY OF TAX ADMINISTRATION -AN IMPORTANT FACTOR FOR INCREASING TAX ACCOUNTABILITY

2020 ◽  
Vol 8 (3) ◽  
pp. 40-48
Author(s):  
Uguloy Berdiyeva ◽  
Keyword(s):  
Tax Evasion ◽  
The State ◽  
Tax Administration ◽  
Tax Collection ◽  
State Budget ◽  
Effective Activity

The article discusses the issues of increasing the level of tax collection on the basis of improving tax administration, ensuring the full payment of taxes and fees to the state budget, reducing the likelihood of tax evasion.

CORRELATION BETWEEN TAX POLICY AND CORRUPTION IN THE LEGAL PERSPECTIVE FOR COUNTRY'S ECONOMIC GROWTH

2017 ◽  
Vol 1 (2) ◽  
pp. 205
Author(s):  
Gideon J. ◽  
Edgar H. ◽  
Ivan I. ◽  
Nabil N. ◽  
Aptina A. ◽  
...  
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Tax Evasion ◽  
Tax Policy ◽  
Public Awareness ◽  
Transparency International ◽  
Tax Amnesty ◽  
Legal Perspective ◽  
State Income ◽  
The Government

<p>People Tax is the main source of state income. The better the tax policy of a country, the better the development of a country. One of the factors that influence the level of public awareness in paying taxes is corruption. Study shows that tax collection is one of them influenced by corruption. In the data of Corruption Perceptions Index 2016 reported by Transparency International, Indonesia is ranked 90 out of 176 countries. Tax evasion is a serious problem for many countries. Every year, the government loses revenue potential as many residents evade taxes in various ways. For this reason, the government implements tax amnesty. Tax amnesty is designed to permanently reduce the amount of underground economy activity, thereby increasing tax revenues in the future and developing countries can grow well.</p>

scholarly journals Respecting freedom in the absence of compassion: realistic behavior by public officials for the COVID-19 vaccination program

2021 ◽  
Author(s):  
Dalmacito A Cordero
Keyword(s):  
Real Life ◽  
Current Situation ◽  
Vaccination Program ◽  
Negative Effects ◽  
Public Officials ◽  
The Government ◽  
Survival Of The Fittest

Abstract The virtue of compassion is a valid antidote to lighten the burden of negative effects brought by the COVID-19 pandemic. However, real-life situations can attest that this is not always the kind of behavior for some people since the current situation is considered as ‘survival of the fittest.’ In its absence, the respect of freedom by public officials to every citizen is a great substitute most especially in the implementation of the government’s vaccination program. This behavior actualizes every person’s plan of protection without being pressured. This right needs to be provided and not taken away by the government.

scholarly journals Rebuilding public trust: a clarified response to COVID-19 vaccine hesitancy predicament

2021 ◽  
Author(s):  
Dalmacito A Cordero
Keyword(s):  
Role Models ◽  
Public Trust ◽  
Medical Doctor ◽  
Vaccine Hesitancy ◽  
Local Health ◽  
Public Officials ◽  
Defensive Strategy ◽  
Health Authorities ◽  
Local Health Care ◽  
The Government

Abstract As the world welcomes the availability and distribution of COVID-19 vaccines, coupled with it is the ‘hesitant’ predicament of some Filipinos to get vaccinated because of the confusing information regarding its efficacy. With this, the government needs to build up public trust to assure a successful vaccination program. A recent study suggested that a more ‘localized’ public education and role-modeling from public officials and health authorities can help in building public trust. However, this needs a lot of clarification if applied in the current situation where education is fully executed online. The problem now lies in the country’s poor internet connectivity which greatly affects the online setup. This study then proposes that a house-to-house massive information campaign by local health care personnel which is led by a medical doctor to ensure a credible explanation of the entire procedure. In the same way, the idea of public officials as role-models seemed to be ineffective since there were already casualties linked to the vaccine. A consistent transparent approach is suggested in lieu of this which can prepare the country for a more defensive strategy to fight the pandemic.

scholarly journals Governmental Taxation of Households Choosing between a National Currency and a Cryptocurrency

Games ◽  
2021 ◽  
Vol 12 (2) ◽  
pp. 34
Author(s):  
Guizhou Wang ◽  
Kjell Hausken
Keyword(s):  
Central Bank ◽  
Tax Evasion ◽  
National Currency ◽  
Tax Rate ◽  
Digital Currency ◽  
Output Elasticity ◽  
Penalty Factor ◽  
The Government ◽  
Parameter Values ◽  
High Output

: A game between a representative household and a government was analyzed. The household chose which fractions of two currencies to hold, e.g., a national currency such as a Central Bank Digital Currency (CBDC) and a global currency such as Bitcoin or Facebook’s Diem, and chose the tax evasion probability for each currency. The government chose, for each currency, the probability of detecting and prosecuting tax evasion, the tax rate, and the penalty factor imposed on the household when tax evasion was successfully detected and prosecuted. The household′s fraction of the national currency, the government’s monitoring probability of the national currency, and the penalty factor imposed on the global currency, increased in the household′s Cobb Douglas output elasticity for the national currency. The household′s probabilities of tax evasion on both currencies increased in the government’s Cobb Douglas output elasticity for the national currency. The government’s taxation on both currencies decreased in the output elasticity for the national currency. High output elasticity for the national currency eventually induced the government to tax that currency more than the global currency. The household′s probability of tax evasion on the global currency increased in the government’s output elasticity for that currency. The household was less (more) likely to tax evade on the national (global) currency if the government valued taxation and penalty on the national (global) currency. The results are illustrated numerically where each of the eight parameter values were varied relative to a benchmark.

How corruption investigations undermine regime support: evidence from China

2021 ◽  
pp. 1-16
Author(s):  
Yuhua Wang ◽  
Bruce J. Dickson
Keyword(s):  
Communist Party ◽  
Political Institutions ◽  
Central Government ◽  
Public Support ◽  
Public Officials ◽  
Difference In Differences ◽  
The World ◽  
The Government ◽  
Regime Support ◽  
Support Evidence

Abstract Authoritarian leaders around the world often fight against corruption in an effort to win public support. Conventional wisdom holds that this strategy works because leaders can signal their benevolent intentions by removing corrupt officials. We argue that fighting against corruption can undermine regime support. By revealing scandals of corrupt officials, corruption investigations can alter citizens' beliefs about public officials and lead to disenchantment about political institutions. We test this argument by examining how China's current anti-corruption campaign has changed citizens' public support for the government and the Communist Party. We analyze the results of two original surveys conducted before and during the campaign, and employ a difference-in-differences strategy to show that corruption investigations, at the margin, suppress respondents' support for the central government and party. We also examine our respondents' prior and posterior beliefs, and the results support our updating mechanism.

GSTChain: A Blockchain Network Application for the Goods and Services Tax

2021 ◽  
pp. 2250002
Author(s):  
S. Hasnain Pasha ◽  
Deepti Mehrotra ◽  
Jerry Chun-Wei Lin ◽  
Gautam Srivastava
Keyword(s):  
Network Technology ◽  
Tax Collection ◽  
Implementation Challenges ◽  
Goods And Services ◽  
Effective System ◽  
Indian State ◽  
Network Application ◽  
The Government

In 2017, the Government of India launched the goods and services tax (GST), referred to as “one tax, one nation, one market”. This tax all Indian businesses are subject to this tax. GST was framed with the objective of bringing tax handling for all businesses onto a single platform and developing a transparent and effective system in which all businesses will pay taxes. This paper identifies and addresses GST implementation challenges and proposes a solution, GSTChain, using blockchain network technology. Currently, GST is collected at the sellers end and bifurcated between the Indian state and central governments. GSTChain is a blockchain system based on trust and autonomy with the objective of making taxpayers’ lives easy and tax collection efficient and transparent for the government.

EFFICIENCY OF THE TAX SYSTEM ON THE BASIS OF TRANSPARENCY AND REFORM

2021 ◽  
Vol 298 (5 Part 1) ◽  
pp. 219-222
Author(s):  
Ludmila Oleinikova ◽  
Keyword(s):  
Public Goods ◽  
Tax Evasion ◽  
Small Businesses ◽  
National Level ◽  
Tax Base ◽  
Tax System ◽  
Tax Legislation ◽  
Improve Compliance ◽  
Factors Of Production ◽  
The Government

The expediency is reasoned of creating a competitive environment in the context of globalization and limited factors of production, forcing countries to compete with each other and take measures to attract owners of factors of production by forming the optimal combination of institutional, public goods and tax preferences, where only tax preferences are not the key to success in competition, as opposed to general conditions of taxation in combination with infrastructural, institutional and public goods. Emphasis is placed on the rapid digitalization of economic processes and the globalization of even small businesses through online platforms that will significantly affect the struggle in the field of economic and institutional competition. It has been proven that it is already necessary to respond to new challenges which are associated with tax evasion, erosion of the tax base, a significant geographical gap between the location of factors of production and the jurisdiction of profit. It is established that the answers to these risks lie both in the plane of institutional readiness and in the plane of the effectiveness of the application of tax administration tools, including control, as well as the synergy of measures at the macro and micro levels. The variety of tools used in world practice to improve compliance with tax legislation is studied and their division into categories is indicated. The expediency of using mechanisms to ensure the transparency of the tax system is substantiated, along with measures to assure the transparency of taxpayers before the tax authorities at the national level, as well as mechanisms to provide accountability and transparency of the tax authorities themselves to the government, parliament and taxpayers. It is proposed, taking into account foreign experience, in addition to quantitative indicators of tax effectiveness, to use supplementary indicators that characterize the work of tax authorities, considering economy, effectiveness, efficiency, which will deepen the level of tax system performance.

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