The effect of awareness and incentives on tax evasion

Annette Alstadsæter and Martin Jacob

No 147, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: We observe a specific type of tax evasion among business owners in Swedish administrative panel data, after the tax authority has approved all tax returns. For the period 2006-2009, approximately 5% of tax returns overstate a claimed dividend allowance. Tax awareness decreases and complexity increases the likelihood of misreporting. Some 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. The majority of misreporting cases remains undetected. Self-correction is the dominant type of detection.

Keywords: tax evasion; tax compliance; tax enforcement; tax awareness; detection (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-iue, nep-pbe and nep-pub
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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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Persistent link: https://EconPapers.repec.org/RePEc:zbw:arqudp:147

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