TAXPAYER ETHICSPaying tax: deterren

TAXPAYER ETHICS
Paying tax: deterrence theory?
A generally held belief and one upon which the Self Assessment tax system in the United Kingdom relies for its success, is that the taxpayer’s fear of being detected while evading tax, will ensure that they will comply with tax law. The Self Assessment legislation has introduced penalties for the late filing of tax returns and a system of random audit of tax returns. Both these new measures have been heavily publicised in the Inland Revenue’s media campaigns. The fear of detection or ‘deterrence theory’ suggests that taxpayers will maximise their own self interest by performing a cost-benefit analysis, comparing the benefits of evading tax with the penalties of being caught out evading tax (Reckers et al . 1994). The penalties of evading may not only be economic in the form of fines but also sociological. Taxpayers consider their own self image and social obligations which would be damaged by being caught evading tax. Currently only between 2.5 per cent and 5 per cent of self-employed taxpayers and 3 per cent of companies are investigated by the Inland Revenue each year. In addition, the new random audit system will only select 8000 tax returns or 0.1 per cent of tax returns for audit. (This actually equates to approximately twenty tax returns per tax district.) Given the comparatively small number of tax investigations and random audits, deterrence theory would suggest that a significant number of taxpayers would evade paying tax. However, evidence from the USA where only 1 per cent of tax returns are selected for tax audit, suggests that compliance rates are as high as 83 per cent (Doucet 1995). Deterrence theory does not therefore provide a wholly satisfactory explanation of why taxpayers comply with tax laws. The question then is this: is there any evidence to suggest that people comply with tax laws because they believe that paying tax is an ethically correct thing to do?

Results (Indonesian) 1:

ETIKA PEMBAYAR PAJAKMembayar pajak: pencegahan teori?A generally held belief and one upon which the Self Assessment tax system in the United Kingdom relies for its success, is that the taxpayer’s fear of being detected while evading tax, will ensure that they will comply with tax law. The Self Assessment legislation has introduced penalties for the late filing of tax returns and a system of random audit of tax returns. Both these new measures have been heavily publicised in the Inland Revenue’s media campaigns. The fear of detection or ‘deterrence theory’ suggests that taxpayers will maximise their own self interest by performing a cost-benefit analysis, comparing the benefits of evading tax with the penalties of being caught out evading tax (Reckers et al . 1994). The penalties of evading may not only be economic in the form of fines but also sociological. Taxpayers consider their own self image and social obligations which would be damaged by being caught evading tax. Currently only between 2.5 per cent and 5 per cent of self-employed taxpayers and 3 per cent of companies are investigated by the Inland Revenue each year. In addition, the new random audit system will only select 8000 tax returns or 0.1 per cent of tax returns for audit. (This actually equates to approximately twenty tax returns per tax district.) Given the comparatively small number of tax investigations and random audits, deterrence theory would suggest that a significant number of taxpayers would evade paying tax. However, evidence from the USA where only 1 per cent of tax returns are selected for tax audit, suggests that compliance rates are as high as 83 per cent (Doucet 1995). Deterrence theory does not therefore provide a wholly satisfactory explanation of why taxpayers comply with tax laws. The question then is this: is there any evidence to suggest that people comply with tax laws because they believe that paying tax is an ethically correct thing to do?

Results (Indonesian) 2:

WAJIB PAJAK ETIKA
Membayar pajak: teori pencegahan
A keyakinan umum dan satu di mana sistem pajak Self Assessment di Inggris mengandalkan untuk sukses, adalah bahwa ketakutan wajib pajak dari yang terdeteksi sementara menghindari pajak, akan memastikan bahwa mereka akan mematuhi pajak hukum. Undang-undang Self Assessment telah memperkenalkan hukuman untuk pengajuan keterlambatan pengembalian pajak dan sistem audit acak pajak. Kedua langkah-langkah baru telah dipublikasikan besar-besaran dalam kampanye media Inland Revenue ini. Ketakutan deteksi atau 'pencegahan teori' menunjukkan bahwa pembayar pajak akan memaksimalkan mereka sendiri kepentingan diri dengan melakukan analisis biaya-manfaat, yang membandingkan manfaat menghindari pajak dengan hukuman yang tertangkap menghindari pajak (Reckers et al. 1994). Hukuman dari Evading mungkin tidak hanya ekonomi dalam bentuk denda, tetapi juga sosiologis. Wajib Pajak mempertimbangkan citra diri mereka sendiri dan kewajiban sosial yang akan rusak oleh tertangkap menghindari pajak. Saat ini hanya antara 2,5 persen dan 5 persen dari wajib pajak wiraswasta dan 3 persen dari perusahaan yang diselidiki oleh Inland Revenue setiap tahun. Selain itu, sistem audit acak baru hanya akan memilih 8000 pengembalian pajak atau 0,1 persen dari pajak untuk audit. (Ini benar-benar setara dengan sekitar dua puluh pajak per kabupaten pajak.) Mengingat jumlah yang relatif kecil dari investigasi pajak dan audit acak, teori pencegahan akan menunjukkan bahwa sejumlah besar pembayar pajak akan menghindari membayar pajak. Namun, bukti dari Amerika Serikat di mana hanya 1 persen dari pajak yang dipilih untuk pemeriksaan pajak, menunjukkan bahwa tingkat kepatuhan setinggi 83 persen (Doucet 1995). Teori pencegahan tidak karena itu memberikan penjelasan sepenuhnya memuaskan mengapa wajib pajak mematuhi undang-undang pajak. Pertanyaannya kemudian adalah: apakah ada bukti yang menunjukkan bahwa orang-orang mematuhi hukum pajak karena mereka percaya bahwa membayar pajak adalah hal yang etis yang benar untuk dilakukan?