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Tax Compliance Models: From Economic to Behavioral Approaches

Transylvanian Review of Administrative Sciences

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Title Tax Compliance Models: From Economic to Behavioral Approaches
 
Creator BĂTRÂNCEA, Larissa Margareta; Lecturer, Department of Business, Faculty of Business,
Babeş-Bolyai University, Cluj-Napoca, Romania
NICHITA, Ramona Anca; PhD Candidate, Department of Finance,
Faculty of Economics and Business Administration,
Babeş-Bolyai University, Cluj-Napoca, Romania
BĂTRÂNCEA, Ioan; Professor, Department of Finance,
Faculty of Economics and Business Administration,
Babeş-Bolyai University, Cluj-Napoca, Romania
MOLDOVAN, Bogdan Andrei; Teaching Assistant, Public Administration Department, Faculty
of Political, Administrative and Communication Sciences,
Babeş-Bolyai University, Cluj-Napoca, Romania
 
Subject tax compliance; economic model of tax compliance; behavioral model of tax compliance; income tax evasion; ‘slippery slope’ framework.
 
Description The paper reviews the models of tax compliance with an emphasis on economic and behavioral perspectives. Although the standard tax evasion model of Allingham and Sandmo and other similar economic models capture some important aspects of tax compliance (i.e., taxpayers’ response to increases in tax rate, audit probability, penalty rate) they do not suffice the need for an accurate prediction of taxpayers’ behavior. The reason is that they do not offer a comprehensive perspective on the sociological and psychological factors which shape compliance (i.e., attitudes, beliefs, norms, perceptions, motivations). Therefore, the researchers have considered examining taxpayers’ inner motivations, beliefs, perceptions, attitudes in order to accurately predict taxpayers’ behavior. As a response to their quest, behavioral models of tax compliance have emerged. Among the sociological and psychological factors which shape tax compliance, the ‘slippery slope’ framework singles out trust in authorities and the perception of the power of authorities. The aim of the paper is to contribute to the understanding of the reasons for which there is a need for a tax compliance model which incorporates both economic and behavioral features and why governments and tax authorities should consider these models when designing fiscal policies.
 
Publisher Babes Bolyai University
 
Contributor Acknowledgement: This work was supported by the project ‘Post-Doctoral Studies in Economics: Training Program for Elite Researchers – SPODE’ co-funded from the European Social Fund through the Development of Human Resources Operational Program 2007-2013,
 
Date 2012-06-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://rtsa.ro/tras/index.php/tras/article/view/58
 
Source Transylvanian Review of Administrative Sciences; 2012: Issue No. 36 E/June; 13-26
18422845
 
Language eng
 
Relation http://rtsa.ro/tras/index.php/tras/article/view/58/54
 
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