ADVANCE TAX PAYMENTS AND TAX EVASION: A NOTE

Keisuke Morita ()
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Keisuke Morita: Faculty of Economics, Kyoto Gakuen University, Nanjo-Otani 1-1, Sogabe, Kameoka, Kyoto 621-8555, Japan

The Singapore Economic Review (SER), 2015, vol. 60, issue 05, 1-10

Abstract: In the withholding tax system, the tax authority requires taxpayers to pay taxes in advance before filing their tax returns. This note investigates how advance tax payments affect the extent of tax evasion in the economy. We show that the extent of tax evasion decreases with increasing prepaid taxes, if individuals behave according to prospect theory.

Keywords: Advance tax payments; prospect theory; tax evasion (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S0217590814500507

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