Tax compliance in a modified VCM experiment
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| Year of publication | 2014 |
| Type | Appeared in Conference without Proceedings |
| MU Faculty or unit | |
| Citation | |
| Description | Tax compliance is one of the fields where the homo economicus concept loses its universal validity; the theoretical model (based on expected utility theory) is not able to cover the complexity of individual compliance decision. Due to intrinsic m otivations of the taxpayers, the empirical research is incapable to look into the factors affecting taxpayer?s decision. We investigate individual comply behavior using a modified voluntary contribution mechanism with audit and penalty system. Two factors that have proven to have impacts on the level of tax compliance are studied i?1C the probability of an audit and the penalty rate. The paper focuses on testing relative effectiveness of these two factors. Based on previous experimental findings, we hypothe size that the tax compliance is considerably more affected by higher probability of an audit relative to increasing penalty rate. |
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