Tax Evasion in Switzerland: The Roles of Deterrence and Tax Morale

Lars Feld and Bruno Frey

No 284, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: The traditional economic approach to tax evasion does not appear to be particularly successful in explaining the extent of tax compliance. We argue instead that a psychological tax contract which establishes a fiscal exchange between the state and the citizens shapes tax compliance to a large extent. In that respect, a case study of Switzerland is useful because the small size of the cantons and their direct democratic political systems procedurally establish a close exchange relationship between taxpayers and tax authorities. In this paper, evidence is discussed on how tax evasion and tax morale in Switzerland evolved over time. In addition, the impact of economic, legal, socio-demographic, psychological and institutional factors on Swiss tax evasion is discussed.

Keywords: Tax Evasion; Tax Morale; Deterrence; Responsive Regulation (search for similar items in EconPapers)
JEL-codes: D73 D78 H26 H73 (search for similar items in EconPapers)
Date: 2006-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Working Paper: Tax Evasion in Switzerland: The Roles of Deterrence and Tax Morale (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:284

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