EFFECTS OF CULTURE ON THE RELATIONSHIP BETWEEN TAX EVASION AND PERCEPTION OF CORRUPTION IN INTERNATIONAL ECONOMIES

Paulo Vitor Souza de SOUZA () and Alison Martins Meurer ()
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Paulo Vitor Souza de SOUZA: PhD, Federal University of Paraná; Post-Graduate Accounting Program; Prefeito Lothário Meissner Avenue, 632, 80210-170, Curitiba, Paraná, Brazil
Alison Martins Meurer: PhD, Federal University of Paraná; Post-Graduate Accounting Program; Prefeito Lothário Meissner Avenue, 632, 80210-170, Curitiba, Paraná, Brazil

REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, 2025, vol. 2025, issue 44, 41-59

Abstract: This study aims to examine the effect of national culture on the relationship between the perception of corruption and tax evasion in international economies. For this analysis, data from 81 countries were used, covering a time series that began in 1995 and spanned 21 years of observations. Tax evasion was measured using the Multiple Indicators Multiple Causes (MIMIC) approach to the informal economy. At the same time, the perception of corruption was obtained from the Corruption Perceptions Index calculated by Transparency International. Culture was assessed using Hofstede's Cultural Dimensions: Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long-Term Orientation, and Indulgence. The results were obtained through panel data regressions using pooled and fixed-effects models. The main findings indicate that tax evasion tends to be lower in societies with a higher perception of corruption, which is, in fact, less corrupt. This finding suggests a positive link between social control of corruption and tax compliance. Furthermore, cultural dimensions revealed significant effects on tax evasion levels: societies with higher Power Distance, Uncertainty Avoidance, and Indulgence exhibit more significant tax evasion, whereas cultures characterized by lower Individualism, lower Masculinity, and higher Long-Term Orientation display lower levels of evasion. The interactions between culture and the perception of corruption demonstrated that different cultural contexts can amplify or attenuate the effectiveness of anti-corruption policies. The findings of this research are relevant and contribute to public policy formulation, suggesting that when combating tax evasion, governments should consider local cultural contexts and taxpayers’ perceived corruption, adjusting their strategies to enhance the effectiveness of tax evasion countermeasures.

Keywords: tax evasion; cultural dimensions; perception of corruption; international markets. (search for similar items in EconPapers)
JEL-codes: D73 H26 M14 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:rom:rampas:v:2025:y:2025:i:44:p:41-59

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