The social judgement of the tax avoiding behaviour

Abstract

Social judgment of tax supervision examinations is twofold. Many citizens agree with the aim of the examinations and with the punishment of those intentionally finking out on the obligation of paying tax. Yet many also question the grounds of the arrangements because of the apparent superfluity of many processes and because of the intimidation practiced generally on taxpayers. My essay places the dilemmas of tax avoidance in a wider psychological-economic perspective from the taxpayers’ point-of-view. By practicing tax evasion, some people involved in the economy acquire an unfair, undeserved competitive edge, resulting in a significant welfare deficit in the society their taxes should be supporting. The first step in eliminating tax evasion is identifying the methods of tax evasion. This should be followed by risk analysis and tax control and finally the application of appropriate punitive measures. In individual states, different law regulations are applied against tax evasion. Whatever methods are used, control of bill-distribution and registration are the primary tasks. In sum, I can say that the reform of the tax system will only be successful if it considers the expectations and demands of the people while taking account of their desire for a functional, just tax system and their desire for a simple, unintimidating one. A tax system will be really successful only if it increases economic efficiency by decreasing administrative loads, taxation, and tax evasion. Keywords: hidden economy, tax avoidance, tax evasion