There is considerable evidence that enforcement efforts can increase tax compliance. However, there must be other forces at work because observed compliance levels cannot be fully explained by the level of enforcement actions typical of most tax authorities. Further, there are observed...

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. Concepts of Homo Economicus, endowed with a more refined motivation structure, help to shed light on the tax compliance puzzle. This paper provides...

An explanation for tax morale based upon a simple model of psychological costs that depend on the perceived legitimacy of public policies is introduced. It is shown that empirically observed low levels of tax evasion can be explained even for a risk-neutral taxpayer with such a model. In a...

The fiscal difficulties of LDC's, and the important role for evasion as a part of them, are well-known. Drawing on the rich literature on tax evasion in the public finance literature, much recent research has shed light on two phenomena contributing to this problem: fiscal corruption and evasion...

Tax Evasion is one of the major problems that Tax Administrations face the world over. This is however more pronounced in Developing countries. Tax Evasion is defined in this paper as the act of illegally paying less taxes (or not paying at all) than the amount legally required by the tax law....

Economic theory is paying increasing attention to a non-observed economy (NOE) and its causes. Recently, a couple of works (Rosser et al., 2000, 2003) have claimed that there is a positive relationship between income inequality and the size of NOE. This supposed relationship is not so clear and...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with...