Diversity of Motivations to Engage in Tax Evasion
23 Pages Posted: 26 Apr 2015 Last revised: 5 May 2015
Date Written: December 1, 2013
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
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