AN AGENT-BASED MODEL OF TAX COMPLIANCE: AN APPLICATION TO THE SPANISH CASE

Toni Llacer (), Francisco J. Miguel (), José A. Noguera () and Eduardo Tapia ()
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Toni Llacer: Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain
Francisco J. Miguel: Laboratory for Socio-Historical Dynamics Simulation (LSDS), Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain
José A. Noguera: Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain
Eduardo Tapia: Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain

Advances in Complex Systems (ACS), 2013, vol. 16, issue 04n05, 1-33

Abstract: In this paper, we present a new agent-based model for the simulation of tax compliance and tax evasion behavior (SIMULFIS). The main novelties of the model are the introduction of a "behavioral filter approach" to model tax decisions, the combination of a set of different mechanisms to produce tax compliance (namely rational choice, normative commitments and social influence), and the use of the concept of "fraud opportunity use rate" (FOUR) as the main behavioral outcome. After describing the model in detail, we display the main behavioral and economic results of 1,920 simulations calibrated for the Spanish case and designed to test for the internal validity of SIMULFIS. The behavioral outcomes show that scenarios with strict rational agents strongly overestimate tax evasion, while the introduction of social influence and normative commitments allows to generate more plausible compliance levels under certain deterrence conditions. Interestingly, the relative effect of social influence is shown to be ambivalent: it optimizes compliance under low and middle deterrence conditions, but not when deterrence is made harder. Finally, SIMULFIS economic outcomes are broadly in line with theoretical expectations, thus supporting the reliability of the model.

Keywords: Rational choice; social influence; tax behavior; tax evasion; tax morale (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:wsi:acsxxx:v:16:y:2013:i:04n05:n:s0219525913500070

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DOI: 10.1142/S0219525913500070

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