ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

Taxpayer－friendly Tax Administration Based on Behavioral Science and Its Implications

  • Kang Min Jo Dongduk Women's University

Asian Tax Journal Vol. 20 No. 6 (2019), pp. 63-86

Abstract

The study aims to clarify the concept of taxpayer－friendly tax administration, examine best practices of tax administration as well as its organizational structures in advanced countries, and derive policy implications for the improvement of Korean tax administration. Based on the comprehensive review regarding good examples of advanced tax administration, I establish the concept of taxpayer－friendly tax administration as understanding taxpayer behavior based on scientific evidence, applying compliance risk model to the clientele, and providing timely services that help enhancing taxpayer compliance. In order for National Tax Service (NTS) to renew its identity as a service institution, it is necessary to adopt the bottom－up approach instead of the traditional top－down approach to taxation policy. While the old polity interventions directly call for certain behavior by monetary incentives or penalties, Nudge emphasizes the changes in human behavior by ‘nudging’ them with seemingly trivial but eventually powerful policy design. With a deep understanding of taxpayer behavior, Nudge can be used to develop behavioral interventions which can mitigate disputes and frictions between tax authorities and taxpayers, thereby significantly reduce administration cost and foster taxpayer compliance. The taxpayer－friendly tax administration has to be achieved by Nudge Team that aims to develop service programs that enhance voluntary tax compliance in cooperation with the various interest groups such as clients(taxpayers), partners(tax professionals), and research institutions etc. NTS should incorporate the knowledge management process that demands the evidence－based tax administration for developing and evaluating tax services with key performance measures that help assessing the validity of the programs.

Keywords

  • taxpayer－friendly tax administration
  • behavioral science
  • nudge
  • evidence－based policy making

Related Articles

ATJ
E-SubmissionSitemapContact Us RSS

Asian Tax Journal

Address : 3F, KICPA Bldg., 12 Chungjeongro 7-gil, Seodaemun-gu, Seoul 03736, Republic of Korea

Editor-in-Chief : Prof. Wanyong Kim Editorial Office : Dept. of Finance, Accounting & Taxation, Hanyang Cyber University, 220 Wangsimni-ro, Seongdong-gu, Seoul, Republic of Korea Tel : +82-2-2290-0418 / +82-10-8664-1117 E-mail : taxresearch2@hanmail.net