This essay examines the behavior of tax evasion and bribery and the result of interaction among taxpayers, tax auditors and juridical officials.
This study is based on the established theory of Jean Hindriks, Michael Keen and Abhinay Muthoo(1999), and focuses on the opposing relationship between taxpayers and tax auditors. If taxpayers report their income untruthfully and are discovered by tax auditors, they might offer bribe to cover the illegal conduct. It¡¦s also a temptation to tax auditors. Then it leads to a cycle of bribery. The analysis is based on a finite dynamic game. It explores further the situation where auditors abuse the administrative authority to extort bribe from unlawful taxpayers. It discusses the strategic and colluding relationship between auditors and taxpayers.
The main discovery of the analysis is as follows. Tax evasion is not only an illegal but also criminal act. Besides, tax evasion and corruption coexist. If taxpayers are found bribery for tax evasion and that means tax auditors have committed corruption. The best effective way to prevent corruption is to increase penalty for tax evasion. Taxpayers should be educated if they commit tax evasion, they will be imposed both taxation and penalty. If there is no bribe, the corruption of tax auditors will decrease. On the other hand, it is also necessary to make severer punishment for corruption so that auditors will dare not to receive the bribe. During the process of taxation, auditors are delegated sufficient administrative authority. After declaring income tax, the actual amount of personal taxation depends on the check report auditors hand in. Therefore, in order to prevent tax evasion and corruption, we should make more severe punishment for unlawful auditors and taxpayers.
In conclusion, the main reason for tax evasion is that auditors abuse the authority and cover up the illegality. Therefore, the most direct and effective method of decreasing corruption is to increase penalty for the act of tax evasion.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0628105-155658 |
| Date | 28 June 2005 |
| Creators | HUNG, LI-YUN |
| Contributors | none, none, none |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0628105-155658 |
| Rights | restricted, Copyright information available at source archive |
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