Perceptions of Corruption and Tax Non-Compliance Behaviour: Policy Implications for Developing Countries

43 Pages Posted: 1 Feb 2019

See all articles by Arifin Rosid

Arifin Rosid

Directorate General of Taxation

Chris Evans

University of New South Wales

Binh Tran-Nam

University of New South Wales (UNSW) - School of Taxation and Business Law

Date Written: January 18, 2019

Abstract

Tax non-compliance and perceptions of corruption are key challenges to state-building in developing countries. Using a social psychology approach, we develop a theoretical model in which different forms of perceived corruption can adversely influence the way individual taxpayers behave. We then apply this model to Indonesia, placing our empirical findings in the context of compliance risk management, identifying strategies to improve tax compliance, and exploring how to implement these strategies effectively. We shed light on the applicability of the traditional responsive regulatory approach (used by revenue authorities to deal with intentionally non-compliant taxpayers), which combines measures in attempting to achieve either voluntary or enforced compliance. While the empirical evidence is based on the Indonesian experience, we suggest that our model is sufficiently general and robust to be applicable to other developing countries in the Asia-Pacific region.

Keywords: corruption, tax compliance, compliance risk management, norm-based intervention

JEL Classification: D03, H20, H24, H26

Suggested Citation

Rosid, Arifin and Evans, Christopher Charles and Tran-Nam, Binh, Perceptions of Corruption and Tax Non-Compliance Behaviour: Policy Implications for Developing Countries (January 18, 2019). Available at SSRN: https://ssrn.com/abstract=3317994 or http://dx.doi.org/10.2139/ssrn.3317994

Arifin Rosid

Directorate General of Taxation ( email )

Mar'ie Muhammad Building 8th floor
Jl. Gatot Subroto Kav 40-42
Jakarta, South Jakarta 12190
Indonesia

HOME PAGE: http://arifinrosid.com

Christopher Charles Evans

University of New South Wales ( email )

School of Taxation and Business Law
Australian School of Business, UNSW
Sydney, NSW 2052
Australia

Binh Tran-Nam (Contact Author)

University of New South Wales (UNSW) - School of Taxation and Business Law ( email )

UNSW Sydney
Sydney, NSW 2052
Australia
61-2-9385-9561 (Phone)
61-2-9313-6658 (Fax)

HOME PAGE: http://www.asb.unsw.edu.au/schools/Pages/BinhTran-Nam.aspx

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