Behavioural Insights of Tax Compliance: An Overview of Recent Conceptual and Empirical Approaches

40 Pages Posted: 28 Oct 2016  

Lilia Arcos Holzinger

Australian National University (ANU) - ANU Centre for Social Research and Methods

Nicholas Biddle

Australian National University (ANU) - Centre for Aboriginal Economic Policy Research (CAEPR)

Date Written: October 2016

Abstract

Many tax policies in Australia and comparable countries are based on a completely rational individual decision maker. However, recent evidence in the fields often referred to as behavioural insights (combining behavioural economics and psychology) have shown that people are neither completely rational not completely irrational. Rather, they exhibit predictable biases that reduce the probability of achieving their own stated aims. In this paper, we summarise the evidence on behavioural insights related to tax compliance, with a particular focus on the more limited set of research on the decision making of small-medium enterprises.

Keywords: Behavioural Microeconomics, Underlying Principles, Tax Evasion, Avoidance

JEL Classification: D03, H26

Suggested Citation

Arcos Holzinger, Lilia and Biddle, Nicholas, Behavioural Insights of Tax Compliance: An Overview of Recent Conceptual and Empirical Approaches (October 2016). Tax and Transfer Policy Institute - Working Paper 8/2016. Available at SSRN: https://ssrn.com/abstract=2854586

Lilia Arcos Holzinger

Australian National University (ANU) - ANU Centre for Social Research and Methods ( email )

Beryl Rawson Building (13)
Canberra, ACT 0200
Australia

Nicholas Biddle (Contact Author)

Australian National University (ANU) - Centre for Aboriginal Economic Policy Research (CAEPR) ( email )

Building 21, Hanna Neumann Building
Australia

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