The Study Of Individual Income Tax Compliance

Since personal income tax has a great influence on the income distribution,which can balance efficiency and fair of the allocation,governments have always paid attentions to improve individual income tax compliance.Income tax is one of the means to adjust income distribution and it has the function of promoting the fair distribution of income and encouraging the equal competition.After reading a large amount of literature,this thesis makes a comprehensive analysis of the China’s personal income tax compliance present situation and how taxpayers make decision under uncertain risks.This thesis is divided into five chapters.The first chapter is introduction,mainly introducing the article selected topic background,research purpose and significance.Furthermore,thesis elaborates economic and non-economic factors of tax compliance,based on reading domestic and international literature.Then introduces the content,structure,possible innovation and shortage.The second chapter begins with the concept and classification of tax compliance.Then analysis economic and non-economic factors how to affect the tax compliance by using expected utility model.According to current situation of our country s individual income tax compliance,explains the reason of serious tax erosion of personal income tax.The third chapter introduces the theoretical basis and content of prospect theory.Prospect theory believes that economic man is bounded rationality instead of completely rational in decision-making.By constructing value and weight function,the prospect theory model describes how the decision made under uncertain risk.Scholars also calculate the value range of the parameters in the function.The forth chapter designs experiments and simulates tax paying situation by considering our country national condition.The first experiment includes ’gain’and ’loss’ situation under uncertain risk depends on ’reference point’ made by decision maker.It studies the taxpayers how to make decision and the experimental result provides reference basis on tax inspection rate and fine rate.The second experiment studies the application of prospect theory in tax pre-deposit.According to the experimental data,thesis analysis how to improve individual income tax compliance by prospect theory.The last chapter puts forward suggestions on improving the tax compliance of individual income tax from the aspects of perfecting the tax system,strengthening tax administration and improving taxpayer’s moral qualities.