What is it about?

Recently, a small but burgeoning literature has argued that tax non-compliance cannot be fully explained using the conventional rational economic actor approach which views non-compliance as occurring when the pay-off is greater than the expected cost of being caught and punished. Instead, a social actor approach has emerged which views tax non-compliance as higher when “tax morale”, defined as the intrinsic motivation to pay taxes, is low. To advance this social actor model, the purpose of this paper is to evaluate the individual and national heterogeneity in tax morale, which is crucial if tax compliance is to be improved.

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Why is it important?

To do this, the authors report data from the 2010 Life in Transition Survey on tax morale in 35 Eurasian countries. Logit econometric analysis reveals, on the one hand, that there is higher tax morale among middle-aged, married, homeowners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure. Rather than continue with the rational actor approach, this paper reveals that how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance.


This paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.

Professor Colin C Williams
University of Sheffield

Read the Original

This page is a summary of: Explaining individual- and country-level variations in unregistered employment using a multi-level model: evidence from 35 Eurasian countries, South East European Journal of Economics and Business, December 2017, De Gruyter, DOI: 10.1515/jeb-2017-0017.
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