Arbeitspapier
The Effect of Awareness and Incentives on Tax Evasion
We examine the role of tax incentives, tax awareness, and complexity in tax evasion. We observe a specific type of tax evasion among business owners in Swedish administrative panel data, after the tax authority has approved all tax returns. For the period 20062009, approximately 5% of tax returns overstate a claimed dividend allowance. Tax awareness decreases and complexity increases the likelihood of misreporting. Our results indicate that some observed misreporting could be accidental, while some misreporting is deliberate tax evasion. We identify a positive and significant effect of tax rates on tax evasion, by exploiting a large kink in the tax schedule. The majority of misreporting cases remains undetected by the tax authority. Self-correction of tax evasion by taxpayers is the dominant type of detection.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 4369
- Classification
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Wirtschaft
Tax Evasion and Avoidance
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Household Saving; Personal Finance
- Subject
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tax evasion
tax compliance
tax enforcement
tax awareness
detection
- Event
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Geistige Schöpfung
- (who)
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Alstadsæter, Annette
Jacob, Martin
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2013
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Alstadsæter, Annette
- Jacob, Martin
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2013
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