Improving Tax Administration's Services as a Factor of Tax Compliance: The Case of Tax Audit

Abstract

In this paper the experiences of taxpayers with the tax audits services as an important tool of tax authorities’ struggle against tax evasion are discussed. In the theoretical part of the paper the factors of tax compliance and the tax authorities’ measures in combating tax evasion are examined, the levels of tax rates and the compliance burden of European Union member states’ tax systems are compared. In the empirical part of the paper the experiences of Slovenian companies with tax audit services are analyzed. Better understanding of the drivers of taxpayer compliance behavior allows tax administration to identify and implement policy measures more effectively.

Effects of taxpayer compliance with taxpayer consciousness as intervening variable

“…Studies that rely on legal science perspectives are carried out by other researchers with the assumption that either through the threat of fear it is possible to be examined or then subject to taxation sanctions will force the taxpayer to comply with their obligations (Allingham & Sandmo, 1972). Meanwhile, most of the research related to the relationship of increasing tax services to compliance was examined using a persuasive and cooperative approach between taxpayers and taxation authorities (Feld & Frey, 2002;Alm et al, 2010;Vossler et al, 2011;De Simone, 2013;Hauptman et al, 2014). The effectiveness of this collaboration is also influenced by the calculation of profit and loss, both on the taxpayer's side and the tax authority.…”

Audits as a Vaccine or Just Aspirin?

“…Using different empirical strategies to consider the non-randomness of the selection of firms, their empirical results showed consistently that firms receiving a letter containing the threat of an audit decreased their diesel tax credits by around 10 per cent. Hauptman et al (2014) explored the experience of taxpayers with audits and on the basis of empirical results for Slovenia found that 71.8% taxpayers were satisfied with the audit. At the same time, the authors recommended that the tax administration continue with the application of new possibilities for the purpose of strengthening the level of tax compliance.…”

Estimation of Tax Administration Efficiency in Russian Federation in context of budget tax revenues

“…The performance of tax administration is based on the timing and quality of the tax authorities' compliance with any established procedures, including mandatory revisions of the decisions of the tax service, or time that a taxpayer shall spend to get in touch with the tax service. There are social aspects that are also relevant, such as the average number of sick days of one staff member per year [13]. In Germany, the tax administration is assessed through performance of the staff of the tax authorities.…”