Can Tax Evasion Be Justified?: A Behavioural Study

Abstract

Tax evasion is the deliberate and intentional effort on the part of the tax payers by the way of misrepresentation or concealment of the true state of the income to the tax authorities to reduce tax liability or to avoid the tax liability by the adoption of unfair means like declaring less incomes, profits or gains than actually what they have earned or overstating expenses etc. The present study has been carried out to unearth the underlying reasons or the ethics of tax evasion in the opinion of the tax practitioners, PG students of the Department of Commerce, BU and Teachers of BU to evaluate the impact of tax evasion on the economy as per the tax practitioners and to find out the methods to curb tax evasion in accordance with the tax professionals. The result of the study suggested that the ethics of the tax evasion were high rate of taxes, lack of awareness, prevalence of corruption and the inefficiency of the tax administration. As far as the effects of the evasion are concerned majority of the respondents held the opinion that tax evasion has significant negative implications towards the economy by augmenting the inflation, reducing the fund available for the public expenditure etc. The result of the study also suggested that the tax evasion can be curbed by the suggested ways such as by reducing the complexity of the tax procedures, by reducing the tax evasion, by implementing the anticorruption laws, by increasing the vigilance except the cancellation of the registration of the tax practioners.

Keywords: Tax Evasion, Inflation, Anticorruption Laws, Tax Awareness, Ethics of Tax Evasion, Ethics, Public Expenditure