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Tax Policy Measures to Combat the SARS-CoV-2 Pandemic and Considerations to Improve Tax Compliance: A Behavioral Perspective

James Alm (), Kay Blaufus (), Martin Fochmann (), Erich Kirchler (), Peter N. C. Mohr (), Nina E. Olson () and Benno Torgler ()
Additional contact information
Kay Blaufus: University of Hanover
Martin Fochmann: Free University of Berlin
Erich Kirchler: University of Vienna
Peter N. C. Mohr: Free University of Berlin
Nina E. Olson: Center for Taxpayer Rights
Benno Torgler: Queensland University of Technology

No 2102, Working Papers from Tulane University, Department of Economics

Abstract: Governments have taken remarkable measures during the SARS-CoV-2 pandemic in their efforts to safeguard citizens’ health and the economy. As a consequence, public debts have reached unprecedented levels, which will require at some point higher taxes. Ensuring that citizens pay these taxes requires consideration of the many factors that will likely affect their tax compliance decisions. In this paper, we reflect from a behavioral economic perspective the impact of tax policy measures on the perception, evaluation, and behavior of citizens and derive considerations to devise appropriate tax policies to ensure compliance in the future. We start with speculations about citizens’ views of governmental restrictions and economic stimulus measures in response to the crisis, we apply these speculations to the acceptance and perceived effectiveness of policy measures on citizens’ tax compliance behaviors, and we finish with their likely impact on determinants of tax compliance. Building on the derived insights, we deduce a set of considerations to improve tax compliance – and to generate the necessary tax revenues to deal with the after-effects of SARS-CoV-2 when the pandemic is under control: communication, transparency and justification of measures, access to support, service provision, audits and penalties in case of free-riding, targeted audits, building social norms of cooperation, consideration of framing effects, development of plans and strategies for the future, and anticipation of hindsight biases.

Keywords: Covid-19 crisis; Tax compliance; Tehavioral economics; Behavioral taxation (search for similar items in EconPapers)
JEL-codes: H12 H20 H26 D91 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-hea, nep-iue, nep-pbe and nep-pub
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http://repec.tulane.edu/RePEc/pdf/tul2102.pdf First Version, January 2021 (application/pdf)

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Journal Article: Tax Policy Measures to Combat the SARS-CoV-2 Pandemic and Considerations to Improve Tax Compliance: A Behavioral Perspective (2020) Downloads
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