Diversity of Motivations to Engage in Tax Evasion

23 Pages Posted: 26 Apr 2015 Last revised: 5 May 2015

See all articles by Mihaly Fazekas

Mihaly Fazekas

University of Cambridge - Faculty of Human, Social, and Political Science

Marton Medgyesi

Independent

Istvan Janos Toth

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS); CRCB

Date Written: December 1, 2013

Abstract

This paper identifies types of tax evaders and explores their divergent motivations for evading taxation. The data derives from two large-scale population surveys conducted in 2008 and 2012 in Hungary. Cluster analysis captured two distinct types of tax evaders: 1) poverty escape-type and 2) better-off fake entrepreneurship-type, partially confirming existing typologies. Logistic regression analysis reveals that these two groups are characterised by distinct motivations to evade taxation: the first group acts predominantly out of necessity; the second group’s choice is primarily driven by rational calculation.

Keywords: hidden employment, unreported employment, tax evasion typology, motivations for tax evasion

JEL Classification: J46, J48, H26, Z13

Suggested Citation

Fazekas, Mihaly and Medgyesi, Marton and Toth, Istvan Janos, Diversity of Motivations to Engage in Tax Evasion (December 1, 2013). Available at SSRN: https://ssrn.com/abstract=2596207 or http://dx.doi.org/10.2139/ssrn.2596207

Mihaly Fazekas

University of Cambridge - Faculty of Human, Social, and Political Science ( email )

Cambridge, CB3 9DD
United Kingdom

Marton Medgyesi

Independent

No Address Available

Istvan Janos Toth (Contact Author)

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS) ( email )

Budaorsi ut 45
Budapest, 1112
Hungary

HOME PAGE: http://www.wargo.hu/tij/index.html

CRCB ( email )

Lángliliom utca 3.
Budapest, 1037
Hungary
+36203345825 (Phone)

HOME PAGE: http://www.crcb.eu

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