Reasons of Tax Avoidance and Tax Evasion: Reflections from Pakistan

Mughal, Muhammad Muazzam

doi:10.22610/jebs.v4i4.320

Cited by 33 publications

(24 citation statements)

References 10 publications

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“…These variables are in confirmation with findings of prior, small-scale tax evasion studies for Pakistan, too (Mughal and Akram, 2012;Awan and Hannan, 2014;Khan and Ahmad, 2014).…”

Section: Figure 1: Predictive Probabilities Of Treatment Assignment -supporting

confidence: 89%

The impact of media campaigns on tax filing: quasi-experimental evidence from Pakistan

Koumpias

Martínez-Vázquez

2019

Journal of Asian Economics

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This paper examines the effect of mass media campaigns on income tax filing using survey data from Pakistan. We use information collected about a pro-tax filing communication campaign shortly after the 2013-14 tax filing deadline by Pakistan's Federal Board of Revenue. We use an inverse probability-weighted regression adjustment estimator to construct comparable treatment and control groups in terms of media exposure and control for predictors of income tax filing. We find that respondents' likelihood of income tax filing significantly increased in response to exposure to newspaper advertisements of information provision surrounding tax eligibility but not those concerning the tax filing deadline or the benefits associated with tax filing in the form of non-application of financial penalties. TV advertisements that relied on moral suasion and solely portrayed selfemployed taxpayers did not significantly improve tax filing for the entire survey population but were effective among the self-employed. This highlights the importance of the content of the message as well as the implementation of targeted media campaigns by a tax administration to enhance income tax filing.

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“…These variables are in confirmation with findings of prior, small-scale tax evasion studies for Pakistan, too (Mughal and Akram, 2012;Awan and Hannan, 2014;Khan and Ahmad, 2014).…”

Section: Figure 1: Predictive Probabilities Of Treatment Assignment -supporting

confidence: 89%

The impact of media campaigns on tax filing: quasi-experimental evidence from Pakistan

Koumpias

Martínez-Vázquez

2019

Journal of Asian Economics

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“…The results indicated that tax evasion led to economic instability while increased tax revenues had the tendency of improving the economic situation of the 29 OECD countries. Mughal and Akram (2012) considered the causes of tax avoidance and evasion by using primary data gathered through administering of questionnaires using descriptive statistical tools, the results indicated that all variables representing the causes of tax evasion and avoidance in Pakistan were accurate and there was a 100% positive relationship among the study variables.…”

Section: Foreign Studiesmentioning

confidence: 99%

“…Universally, tax evasion is considered as a crime, which means it an unlawful act in a global context. However several reasons have been used to justify tax evasion in our contemporary times, such reasons include: high tax rates, illiteracy, lack of proper awareness, corruption in public offices, lack of adequate training for tax officials, embezzlement of tax revenues, loopholes in the tax laws, inability to interpret complex tax laws, weak legal framework and failure on the part of the judicial system to enforce relevant statutes against tax defaulters (Mughal and Akram, 2012;Adebisi & Gbegi, 2013;Obafemi, 2014;Onyeka & Nwankwo, 2016;Folayan & Adeniyi, 2018). In whichever scenario tax evasion occurs, it is usually harmful to an economy especially the evolving economies, in such a manner that development will keep dwindling.…”

Section: Introductionmentioning

confidence: 99%

Tax Evasion and Its Consequences on an Emerging Economy: Nigeria as a Focus

Omodero¹

2019

RWE

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There is a universal understanding that tax evasion is a product of underground economy, however, the two economic scenarios have dissimilar influences on an economy. The effects of tax evasion and underground economy have been examined in this study, in order to establish a statistical evidence of the varying consequences of the two economic circumstances. The study employs secondary form of data ranging from 1991 to 2018 while using ordinary least squares multiple regression technique for the analysis. The findings reveal that tax evasion has a robust significant negative influence on economic growth while underground economy is having a strong and positive significant impact on economic growth of Nigeria. The two independent variables are found to be having very strong relationship with economic growth and are also determining 98.7% of the variation in the Nominal Gross Domestic Product. In the light of these findings, it is obvious that informal economy and tax evasion have become an integral part of Nigeria's economy doing both harm and good substantially. Therefore, the study recommends more effort on the part of the government to encourage good leadership, formulate policies that will enhance voluntary tax compliance and help the informal sector businesses that are legitimate to become officially registered with little or no cost.

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“…The low taxpayers' awareness will create several problems, one of which is tax evasion [49]. Tax evasion in the research of [32] can be described as an act where taxpayers do not obey and purposefully violate the tax laws in order to run away from their responsibility to pay taxes. According to [41], included in tax evasions are calculating and reporting sales revenue to be lower than what it actually is, inflating transaction cost by creating fictitious transaction cost, fictitious export transactions and forging company's financial documents.…”

Section: Introductionmentioning

confidence: 99%

Obedience Pressure and Tax Sanction: An Experimental Study on Tax Compliance

Prananjaya

Narsa²

2019

jak

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This research aims to test the influence of tax sanction and obedience pressure on tax compliance. By applying a 2x2 between-subject factorial experiment method, this research has found the empirical evidence that taxpayers tend to be more tax-compliant when the tax sanction is high rather than low. Next, when taxpayers tend to be more non-compliant when they receive obedience pressure from their superior rather than not. Lastly, from the interaction test between tax sanction and obedience pressure variables, the researcher found empirical evidence that shows that, when given high tax sanctions, a taxpayer will have higher tax compliance rate when they do not receive obedience pressure compared with when they receive obedience pressure. This research has a practical implication that obedience pressure from a superior is a key that could potentially reduce tax compliance rate because, although there are low or high sanctions, if there are any obedience pressure, then the tax compliance rate will be low.

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Reasons of Tax Avoidance and Tax Evasion: Reflections from Pakistan

Cited by 33 publications

References 10 publications

The impact of media campaigns on tax filing: quasi-experimental evidence from Pakistan

The impact of media campaigns on tax filing: quasi-experimental evidence from Pakistan

Tax Evasion and Its Consequences on an Emerging Economy: Nigeria as a Focus

Obedience Pressure and Tax Sanction: An Experimental Study on Tax Compliance

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