Tax Literacy & Government Trust against Tax Evasion

V. Stasinopoulos; Ckastanioti Ckastanioti; D. Stasinopoulos

doi:10.18535/ijsrm/v13i12.em06

Abstract

Tax literacy refers to the citizens’ degree of possession of specific competencies and skills, which are required for understanding tax issues and concepts at a basic level, and to handle their tax obligations at an advanced level. The aim of this paper is to analyse whether the level of tax literacy affects the tax citizens’ compliance and government trust, especially of those with a high level of general scientific academic literacy.

A quantitative survey of 757 physicians was carried out for the purposes of this study, which showed that an increase in tax literacy can be more effective in increasing tax compliance than an increase in the so-called economic and/or financial literacy. Finally, the research showed that when citizens - in this case physicians - are actively involved in managing their personal tax affairs without resorting to a professional accountant/tax advisor, they exhibit a more responsible tax behaviour.

Keywords

Tax EvasionTax LiteracyTrustTax ComplianceShadow Economy

References

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Klapper, L. F., Lusardi, A. & Panos, G. A. (2012). Financial literacy and the financial crisis (No. w17930). National Bureau of Economic Research.Google Scholar ↗
Kirchler, E., Hoelzl, E., Wahl, I. (2008). Enforced versus voluntary tax compliance: The slippery slope framework. Journal of Economic Psychology 29: 210-225.Google Scholar ↗
Lusardi, A. & Mitchell, O. (2013). Financial literacy around the world. Insights: Financial Capability.Google Scholar ↗
Lusardi, A., Mitchell, O. S. & Curto, V. (2014). Financial literacy and financial sophistication in the older population. Journal of pension economics & finance, 13(4), 347-366.Google Scholar ↗
Madi, N.; Kamaluddin, A.; Janggu, T., Ibrahim, M.B.A.; Samah, A.B.A. (2010). Tax Literacy among Employees: Sabah and Sarawak’s Perspective. International Journal of Economics and Finance 2 (1): 218-223.Google Scholar ↗
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Reifner, U., & Herwig, I. (2003). Consumer education and information rights in financial services. Information & Communication Technology Law, 12(2), 125–142.Google Scholar ↗
O’Connor, L. G. (2013). Investors’ information sharing and use in virtual communi- ties. Journal of the American Society for Information Science and Technology, 64(1), 36–47.Google Scholar ↗
OECD (2005). Recommendation on principles and good practices for financial education. OECD Publishing. Retrieved from https://www.oecd.org/finance/financial-education/ 35108560.pdfGoogle Scholar ↗
Remund, R. L. (2010). Financial literacy explicated: The case for a clearer definition in an increasingly complex economy. Journal of Consumer Affairs, 44(2), 276–295.Google Scholar ↗
Stasinopoulos, D., & Kastanioti, C. (2024). The Implementation of Tax Indirect Auditing Methods in Greek Economy Against Tax Evasion. Vision, 0(0). https://doi.org/10.1177/09722629241237395DOI ↗Google Scholar ↗
Stasinopoulos D, Goula A, Kastanioti C, Sarris M, Soulis S (2024a). Estimating Tax Evasion in the Medical Sector in Comparison with Other Human-to-human (Η2Η) Life Services. Journal of Health Management. 2024;26(1):13-27. doi:10.1177/09720634231222991DOI ↗Google Scholar ↗
Stasinopoulos D, Goula A, Kastanioti C, Sarris M, Soulis S (2023). Shadow Economy in Physicians’ Sector: The Physicians’ Point of View from Greece. Journal of Health Management. 2023; 25(3):672-685. doi:10.1177/09720634231195980DOI ↗Google Scholar ↗
Stasinopoulos, D., Goula , A., and Soulis, S (2022a). The Economics of Shadow Economy in Health: The Case of Greek Physicians Sector. Journal οf Health Management (JHM)24(4):617-634.doi:10.1177/09720634221128090DOI ↗Google Scholar ↗
Stasinopoulos,D., Goula , A., and Soulis, S (2022).Estimation of Tax Evasion in the Greek Business Sector. Vision: The Journal of Business Perspective (VIS) (VIS-2021-0356.RV1-doi: 10.1177/09722629221129090)DOI ↗Google Scholar ↗
Stasinopoulos D., Soulis S., Kastanioti C., Stasinopoulos V., Zegkou D. (2018). Evaluation of the Effect of the Economic Crisis on the Pharmaceutical Sector. Financial Statement Analysis Techniques: A Case Study of Greece. Archives of Hellenic Medicine 37(3):358-368Google Scholar ↗

[refR-1] Bardai, B. (1992). Tax Illiteracy in Malaysia: Problems Solutions. Journal of ACCAMADIA 2 (2): 7-31.Google Scholar ↗

[refR-2] Bhushan, P.; Medury, Y. (2013). Determining Tax Literacy of Salaried Individuals - An Empirical Analysis. IOSR Journal of Business and Management: 76-80.Google Scholar ↗

[refR-3] Brackin, T. (2007). Overcoming tax complexity through tax literacy – An analysis of Financial Literacy research in the context of the taxation system. ATTA Conference 2007.Google Scholar ↗

[refR-4] Cvrlje, D. (2015). “Tax Literacy as an Instrument of Combating and Overcoming Tax System Complexity, Low Tax Morale and Tax non-Compliance”, The Macrotheme Review, 4(3), pp. 156-167.Google Scholar ↗

[refR-5] Fallan, L. (1999). Gender, exposure to tax knowledge, and attitudes towards taxation; an experimental approach. Journal of Business Ethics 18 (2): 173-184.Google Scholar ↗

[refR-6] Klapper, L. F., Lusardi, A. & Panos, G. A. (2012). Financial literacy and the financial crisis (No. w17930). National Bureau of Economic Research.Google Scholar ↗

[refR-7] Kirchler, E., Hoelzl, E., Wahl, I. (2008). Enforced versus voluntary tax compliance: The slippery slope framework. Journal of Economic Psychology 29: 210-225.Google Scholar ↗

[refR-8] Lusardi, A. & Mitchell, O. (2013). Financial literacy around the world. Insights: Financial Capability.Google Scholar ↗

[refR-9] Lusardi, A., Mitchell, O. S. & Curto, V. (2014). Financial literacy and financial sophistication in the older population. Journal of pension economics & finance, 13(4), 347-366.Google Scholar ↗

[refR-10] Madi, N.; Kamaluddin, A.; Janggu, T., Ibrahim, M.B.A.; Samah, A.B.A. (2010). Tax Literacy among Employees: Sabah and Sarawak’s Perspective. International Journal of Economics and Finance 2 (1): 218-223.Google Scholar ↗

[refR-11] Mutascu, M.; Danuletiu, D. (2013). The Literacy Impact on Tax Revenues. Economics: 1-24. Discussion Paper. http://www.economics-ejournal.org/economics/discussionpapers/2013-63.Google Scholar ↗

[refR-12] Reifner, U., & Herwig, I. (2003). Consumer education and information rights in financial services. Information & Communication Technology Law, 12(2), 125–142.Google Scholar ↗

[refR-13] O’Connor, L. G. (2013). Investors’ information sharing and use in virtual communi- ties. Journal of the American Society for Information Science and Technology, 64(1), 36–47.Google Scholar ↗

[refR-14] OECD (2005). Recommendation on principles and good practices for financial education. OECD Publishing. Retrieved from https://www.oecd.org/finance/financial-education/ 35108560.pdfGoogle Scholar ↗

[refR-15] Remund, R. L. (2010). Financial literacy explicated: The case for a clearer definition in an increasingly complex economy. Journal of Consumer Affairs, 44(2), 276–295.Google Scholar ↗

[refR-16] Stasinopoulos, D., & Kastanioti, C. (2024). The Implementation of Tax Indirect Auditing Methods in Greek Economy Against Tax Evasion. Vision, 0(0). https://doi.org/10.1177/09722629241237395DOI ↗Google Scholar ↗

[refR-17] Stasinopoulos D, Goula A, Kastanioti C, Sarris M, Soulis S (2024a). Estimating Tax Evasion in the Medical Sector in Comparison with Other Human-to-human (Η2Η) Life Services. Journal of Health Management. 2024;26(1):13-27. doi:10.1177/09720634231222991DOI ↗Google Scholar ↗

[refR-18] Stasinopoulos D, Goula A, Kastanioti C, Sarris M, Soulis S (2023). Shadow Economy in Physicians’ Sector: The Physicians’ Point of View from Greece. Journal of Health Management. 2023; 25(3):672-685. doi:10.1177/09720634231195980DOI ↗Google Scholar ↗

[refR-19] Stasinopoulos, D., Goula , A., and Soulis, S (2022a). The Economics of Shadow Economy in Health: The Case of Greek Physicians Sector. Journal οf Health Management (JHM)24(4):617-634.doi:10.1177/09720634221128090DOI ↗Google Scholar ↗

[refR-20] Stasinopoulos,D., Goula , A., and Soulis, S (2022).Estimation of Tax Evasion in the Greek Business Sector. Vision: The Journal of Business Perspective (VIS) (VIS-2021-0356.RV1-doi: 10.1177/09722629221129090)DOI ↗Google Scholar ↗

[refR-21] Stasinopoulos D., Soulis S., Kastanioti C., Stasinopoulos V., Zegkou D. (2018). Evaluation of the Effect of the Economic Crisis on the Pharmaceutical Sector. Financial Statement Analysis Techniques: A Case Study of Greece. Archives of Hellenic Medicine 37(3):358-368Google Scholar ↗