Does procedural justice in a tax audit situation affect taxpayers’ acceptance of tax audit assessments?

Soo-A Shim, Haerin Shim and Tae Sup Shim

Applied Economics, 2024, vol. 56, issue 22, 2629-2645

Abstract: This study examines the effects of procedural justice and authority power on corporate taxpayers’ decisions to accept tax audit assessments via an experiment related to a hypothetical tax audit. We find that authority power but not procedural justice increases corporate taxpayers’ acceptance of tax authority decisions in a tax audit situation. However, when authority power is low, there is a significant effect of procedural justice in a tax audit on taxpayers’ aggressiveness in their decisions to accept tax audit assessments. According to the results, a combination of policy measures that enhance procedural justice and traditional deterrence measures warrants consideration to increase overall corporate tax compliance.

Date: 2024
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DOI: 10.1080/00036846.2023.2193722

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