Tax and Corruption: A Global Perspective

Abstract

No society is immune from corruption and, within any society, taxation plays a pivotal role in relation to such activity – which can be both positive and negative. On the positive side, the tax system can provide the kind of regulatory framework and institutional foundations which can help to eradicate or constrain corrupt practices. On the negative side, corruption reduces tax compliance. Even perceptions of corruption, whether ‘grand’ or ‘petty’, seriously undermine taxpayers’ intentions to report actual income or sales. The relationship between tax and corruption is therefore complex and critical.