Study On Self-Declaration System Of Individual Income Tax Based On Tax Compliance Theory

With the wealth gap widening in China, it is more important to takeadvantage of individual income tax to regulate the citizen’s income and tomeet their requirements for the fair tax burden. Although, we haveimplemented the system of self-declaration for six years, there are stillmany problems of tax non-compliance, such as the small number of taxdeclaration, irrational structure and the inaccurate amount ofself-declaring. We must remove these barriers in the process of tax reformto create a favorable tax environment.The paper analyzes the factors which influence self-declarationconcerning individual income tax, based on the theory of tax compliancethrough quantitative research. These factors are: if the taxpayers wouldpay taxes voluntarily have related with their emotion and attitude abouttaxpaying, taxpaying morality and values decide the level of taxcompliance. Thus, this article comes up with the hypothesis that a highercompliance consciousness leads to a higher degree of taxcompliance.When we come to the economic factors,the costs of tax compliance(including time costs, money costs, psychologycosts)influences the decision of taxpayers about the tax compliancedirectly. At the same time, this article comes up with the hypothesis that iftime costs and money costs of tax compliance are higher, the odds ratio ofself-declaration will be lower, psychological costs are the opposite.According to analyze of the asymmetric information,this article alsoraise a hypothesis that when information between tax authorities andtaxpayers is more asymmetric, the taxpayer is more likely to make thedecision of non-compliance. Later on, the paper verify the hypothesis onthe basis of questionnaire survey, and makes a conclusion which has boththeoretical and actual meanings finally.