UNDERSTANDING THE DETERMINANTS OF TAX COMPLIANCE BEHAVIOR AS A PREREQUISITE FOR INCREASING PUBLIC LEVIES

In this paper we investigate the most important studies concerning the factors which shape tax compliancebehavior with the aim of understanding how these factors could be used by tax authorities as tools for increasing publicproceedings. In order to do that, we first summarize the most relevant socio psychological, political and economicdeterminants. Among the socio psychological factors, we offer details concerning attitudes, norms, fairnessperceptions, motivational postures, and the way they relate to tax compliance behavior. From the range of politicaldeterminants, we particularly emphasize the importance of tax law complexity. Moreover, we briefly present theevolution of the research on tax behavior starting from the assumptions of the classical model of tax evasion developedby Allingham and Sandmo (1972). We also underline the impact which audit probabilities, fines, tax rates, and incomehave on tax compliance behavior. Second we offer different examples of countries (e.g., Australia, New Zealand) which,based on the understanding of these determinants, have managed to develop models of tax compliance, to apply themand, as a consequence, to boost tax compliance. Third we draw conclusions about the importance of these factors andabout the extent to which they could help other economies to increasingly levy taxes.