Tax Compliance Costs: Cost Burden and Cost Reliability

As documented by empirical research, tax compliance costs are a considerable burden for households and businesses. However, cost estimates may be biased due to survey nonresponse and questionnaire framing effects. Investigating both aspects, we do not find significant evidence for a nonresponse bias. By contrast, our results indicate that framing effects regarding the temporal dimension of cost measurement (temporal framing effects) might alter cost estimates by about 39 percent downward (65 percent upward) on average and by up to 53 percent downward (respectively, 112 percent upward) for small businesses. We also test a number of cost drivers with a focus on e-government features. We do not find any evidence that the use of Belgian e-government applications in 2002 and 2004 significantly reduced compliance costs