The effect of awareness and incentives on tax evasion

Annette Alstadsæter and Martin Jacob ()
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Martin Jacob: WHU – Otto Beisheim School of Management

No 1314, Working Papers from Oxford University Centre for Business Taxation

Abstract: We examine the role of tax incentives and tax awareness on tax evasion. We are able to observe tax evasion of business owners in rich Swedish administrative panel data. During the period of 2006-2009, around 5% of tax returns overstate a claimed dividend allowance even after the tax authority has approved the returns. Tax awareness decreases and complexity increases the likelihood of misreporting. Our results indicate that some of the observed misreporting could be accidental while some misreporting is deliberate tax evasion. We identify a positive and significant effect of tax rates on tax evasion by exploiting a large kink in the tax schedule.

Keywords: Tax evasion; tax compliance; misreporting; tax awareness; income taxation (search for similar items in EconPapers)
JEL-codes: D14 H24 H26 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-eur, nep-iue, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: The Effect of Awareness and Incentives on Tax Evasion (2013)
Working Paper: The effect of awareness and incentives on tax evasion (2013)
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