Abstract

The purposes of this paper are to analyze the determinants of Korean taxpayers' compliance attitudes and to suggest policy measures to improve Korean taxpayers' compliance rates based on the results of the analyses. For these purposes, we use a taxpayer attitude survey conducted by the Korean Public Finance Institution(KIPF) in February 2007. We run multiple regressions of the respondents' compliance attitudes on demographic variables and their perceptions of tax system and its administration, which were expected to have impacts on taxpayers' compliance attitudes. In this paper, we use as a proxy of taxpayers' compliance attitudes two separate variables, "perception of the underreporting of tax liability" and "perception of honest tax payments". Firstly, according to the regression result in which we use the former as a dependent variable, the respondents who pay taxes honestly due to fears of an audit and high income taxpayers have more tendency to consider the underreporting of tax liability as an acceptable behavior. However, the respondents who regard an honest tax return as a national obligation are more likely to disapprove of underreporting. Secondly, the regression result using the latter as a dependent variable, shows that the respondents who are married, more aged and wage earners have a higher level of "perception of honest tax payment" than each corresponding respondents. In addition, the level of "perception of honest tax payment" is likely to be higher for the respondents who think that people pay taxes honestly due to fears of an audit or the third parties' reporting system. But the level of "perception of honest tax payment" is likely to be lower for low income taxpayers. Considering these results, we suggest that the tax authority should try to improve tax compliance rates of unmarried, young and high income taxpayers groups. In particular, the tax authority need to make full use of the objective data such as the third parties' reporting data and also strengthen tax audits for dishonest taxpayers. In addition, the tax authority need to develope social perception such that paying taxes honestly is a national obligation.

Keywords

• Tax Compliance
• Taxpayer Attitude Survey
• Tax Avoidance

Related Articles

• The Effect of Income Type and Composition on Taxpayers’ Risk Aversion and Tax Compliance

  Chang Ki Choe , BYUNG WOOK JUN

  23(4) 9-35

  Abstract Full Text for PDF

• The Impact of Information-Sharing Activities in Online Stock Message Boards on Corporate Tax Avoidance

  Sung-Jun An , Gun Lee

  27(2) 67-101

  Abstract Full Text for PDF Full Text for XML

• A Examination of the Relation between ESG and Tax Avoidance

  Kang, Jeong Yeon , KIM YOUNG CHUL

  27(1) 67-101

  Abstract Full Text for PDF

• Key Audit Matters and Tax Avoidance ：The Informational Value of Tax Accounts and the Role of Auditors

  Grace Goun Kim , Kyeongheum Ra , Won－Wook Choi

  26(2) 71-107

  Abstract Full Text for PDF

• Tax Specialist Auditors and Tax Avoidance: Small and Medium－Sized Accounting Firms

  Hyun Ah Kim

  26(1) 9-36

  Abstract Full Text for PDF