Essay On Tax Compliance

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The aim of taxation is for the benefit of the citizens either in the long run or short run. The focus of taxation should be on the process, rather than the outcome. According to Kelman (1965), he adopted to a theory used by Vogel (1974) in analysing tax compliance. According to Kelman’s illustration, individuals have three reasons as to why they comply, he went further to analyse three different types of tax payers; the compliers, identification and internalization. Compliers pay taxes, because everyone is expected to do so and as such are frightened by the penalties attached to evasion, “identifiers” on the other hand are grossly influenced by social norms, beliefs, coupled with behaviours of family and friends around them. Internalizes are between their behaviours and beliefs. However, a question of importance would be how does social norms affect compliance and how can these norms be altered or changed by government policies. A government is restricted as to how to increase the level of compliance…show more content…
Based on researches carried out it has been noticed that compliance is not necessarily based on enforcements alone, because some countries( developing countries), set penalties for evasion so low that one would have easily evaded and not get caught, so why then do people still comply? Compliance, evasion and avoidance of taxes is as a two sided coin, a citizen who is complying with payment of taxes is not evaded his taxes, on the other hand those who evade or avoid taxes cannot comply with taxation at the same time, it is either one or the other. Fairness on the other hand was discovered to be one of the major determinants to compliance and evasion. An unfair tax system could encourage tax evasion and avoidance largely. So the question to ask would be; ‘’IS THE GOVERNMENT BEING FAIR AND HONEST ENOUGH IN REGARDS

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