Research On The Theory Of Tax Compliance And Its Application In Tax Administration

How to effectively promote tax compliance is a difficult problem which all countries confront with. In order to reveal riddle of tax compliance, lots of hardy, creative researches have been done. But we can not still explain tax compliance behavior satisfactorily. A comparatively systemic research was done in the dissertation on the basis of Game Theory, Information Economics, New Institutional Economics, Crime Economics, and Finance.The primary content of the dissertation is as follows:Section 1 is an analysis of game between taxpayers and tax authoritiesThe Section analyzes the game between taxpayers and tax authorities from the perspective of classical game theory and evolutionary game theory, respectively. The results indicate that tax audit and fine are effective measures for facilitating tax compliance, and the tax evaders who evade large amount of tax is relatively less, the tax evaders who evade small amount of tax is relatively more. The dynamic evolutionary process of game between tax authorities and tax-payers was also analyzed in the Section. The results show that the process of evolution presents the characteristics of periodicity and path dependence.On the basis of foregoing analysis, the policy for improving tax compliance was discussed. Firstly, the objective of reducing tax evasion should be placed the point where the marginal return eliminating tax evasion produces is equal to its marginal cost. Secondly, to make punishment effective, the structure of punishment for tax noncompliance should be nonlinear. Lastly, the combination of endogenous audit rules and random audit rules can generate substantially more compliance than an endogenous audit rules or random audit rules alone.Section 2 is on tax criminal deterrenceThe relationship between deterrence and tax compliance and the limits of criminal deterrence were firstly analyzed. The main limits of tax criminal deterrence is that criminal punishment slower greatly the speed of sanction, that it is also greatly difficult to convict the taxpayers who offend tax law of sin, and that criminal punishment expends plentiful resources when compared with other forms of punishment.Secondly, the conditions which the effective criminal deterrence should have were pointed out in the section. It requires a high detection probability and conviction probability. Criminal deterrence can not achieve significant effect in absence of high probability of detection, because of the nature of risk-seeking the people who offend law usually have.Finally, the section points out that it is because of lack of uniform and clear policy for prosecution, pertinent human asset and disadvantages of institution that China's tax criminal policy can not achieve favorable deterrent effect.Section 3 is a study on tax moraleThe relationship between tax morale and tax compliance was firstly studied. The results show that tax morale has significant, positive effect on tax compliance.Secondly, the determinants of tax morale were analyzed from the perspective of relation contract. The results indicate that corruption, especially judicial corruption undermines tax morale badly, that tax morale decrease with the increase of the number of serious crimes, that the taxpayer's tax morale fall if they were bureaucratically treated by tax authorities and tax morale increase if they were respectfully treated by tax authorities, that a structure of nonlinear punishment is conducive to the emergence of tax morale, that the taxpayers strongly depend on each other when they make decision to comply with tax law or not to.Lastly, the relationship between gender, age, martial status, income, and education level and tax morale were analyzed through one-way analysis of variance, respectively. The results show that the gender, age and martial status of citizens have significant effect on tax morale, but the income level and education level have not significant effect on tax morale.Section 4 is a study on asymmetric information and tax complianceThe section consists of two parts. Part 1 concentrates on symmetric information between taxpayers and the tax authority. The part firstly analyzes the influence which asymmetric information between taxpayers and the tax authorities produces. It results in adverse selection, distortion of the tax system and increase of tax collection cost. Secondly, the policy tools for decreasing asymmetric information between taxpayers and the tax authorities were put forward. Lastly, the section points out that associated game and repeated game can greatly propel the taxpayers to pay taxes honestly.Part 2 discusses the transaction cost between higher and lower tax authorities and tax contract choice. The causes of emergence of transaction costs between higher and lower tax authorities were firstly analyzed in the part. Owing to information asymmetry, the conflict of utility function and opportunism, the transaction costs between higher and lower tax authorities come into being. At the same time, a comparative study between fixed wage contract, share contract and revenue task contract was done in the part and comes to the conclusion that revenue task contract is a rational choice at present because the contract can effectively save transaction costs.The dissertation's primary innovations are as follows:(1) The dynamic evolutionary process of game between tax authorities and tax-payers was analyzed in the dissertation, based on evolutionary game theory. The results show that the process of evolution presents the characteristics of periodicity and path dependence.(2) The dissertation analyzed that the relationship between deterrence and tax compliance and the limits of criminal deterrence, and points out that tax criminal deterrence can not always promote tax compliance. At the same time, the conditions which the effective criminal deterrence should have were pointed out in the dissertation.(3) An elementary analysis on the determinants of tax moraleThe determinants of tax morale were analyzed from the perspective of relation contract, based on data from OECD countries. The results indicate that corruption undermines tax morale badly, and that tax morale decrease with the increase of the number of serious crimes.The relationship between gender, age, martial status, income, and education level and tax morale were analyzed through one-way analysis of variance, respectively. The results show that the gender, age and martial status of citizens have significant effect on tax morale, but the income level and education level have not significant effect on tax morale.(4) A study on asymmetric information and tax complianceThe dissertation firstly points out symmetric information between taxpayers and the tax authority result in taxpayers'adverse selection. The mechanism of taxpayers'adverse selection was illustrated. At the same time, the dissertation points out that associated game and repeated game can greatly propel the taxpayers to pay taxes honestly.Secondly, the causes of emergence of transaction costs between higher and lower tax authorities were analyzed. Furthermore, a comparative study between fixed wage contract, share contract and revenue task contract was done in the part and comes to the conclusion that revenue task contract is a rational choice at present because the contract can effectively save transaction costs.