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Weak Enforcement Strong Deterrence Dialogues with Chinese Lawyers about Tax Evasion and Compliance

37 Pages Posted: 9 Mar 2014 Last revised: 3 Dec 2014

Benjamin van Rooij

University of California, Irvine School of Law

Date Written: March 7, 2014

Abstract

This paper analyses why Chinese lawyers report a high level of perceived deterrence in relation to tax evasion even though enforcement is weak. It finds that deterrence here originates from multiple sources, most directly through clients and more distantly through the firm and the state. Lawyers have highly contextual notions of detection probability and a vague understanding of sanction severity unfitting of the high deterrence found here. In the cases studied, deterrence arises out of a general fear lawyers have of state authorities and clients, as well as through personal morals and social norms in their firm. This shows a broader and deeper approach to deterrence, beyond certainty and severity of punishment for the violation studied, one in which the general perceived risk of such violation is central, whatever its source is.

Keywords: deterrence, compliance, tax law, Chinese law, qualitative methods

JEL Classification: K34, K42

Suggested Citation

van Rooij, Benjamin, Weak Enforcement Strong Deterrence Dialogues with Chinese Lawyers about Tax Evasion and Compliance (March 7, 2014). Law and Social Inquiry, 2015, Forthcoming; UC Irvine School of Law Research Paper No. 2014-19. Available at SSRN: https://ssrn.com/abstract=2406039

Benjamin Van Rooij (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Dr.
Ste. 1000
Irvine, CA 92697-1000
United States

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