Trust, ethics and corruption, tax revenues

It is often argued that tax evasion is widespread. The problem is that a high level of tax evasion reduced Government important reforms implemented the ability and provide adequate public goods. Revenue needs are therefore an important issue. Many discussions about tax specialists have shown that fiscal morality, intrinsic motivation, a key element in pay taxes to explain the level of tax evasion.

It is important to have social capital of mutual trust and honesty in the transitional period deregulation and privatization. It is interesting to analyze the tax morale as individuals often or taxes recognises above had no perceptions with regard to the overall tax burden. So, it could focus on tax evasion alone but a step to go back and tax morale as the dependent variable analyse useful. Tax specialist argues that it is not surprising to see taxpayer resistance movements in the reform process if you are taxed for the first time. Undeveloped tax administrations such as us, mostly in cash management commitment are unwilling to serve in a modern income tax system. A major problem is the lack of leadership skills and experience of the tax administration with market-based control. Moreover, tax collectors are good employees, no quality personnel can be attracted. Thus officials may not sufficiently motivated might but instead readily for opportunities for corruption. Anyway, will increase salaries corruption reduced public sector to the private sector. The reward is highly correlated with measures of law and the quality of the bureaucracy.

Furthermore, much larger problems result from the fact that with an increasing number of taxpayers there is much more difficult to detect tax evasion or circumvention. In this context it is may be interesting to see which shapes control morality.

Tax morale and trust Government

We have seen a fall in tax morale during the period between the years of transition. This result is consistent with the registered corruption improve. This effect is much stronger than the earliest years.

As in many developing countries, we could see that our country in a situation of "Over-government" and "Under-government" is. It is a combination of government intervention and bureaucracy. On the other hand, property rights are not secured and there is a high degree of uncertainty, thus reducing the incentive for investment. In this situation, it is still difficult to find the right balance of State activity. A common use of the exit option in the form of tax evasion or tax fraud by entering the informal economy has the negative effect of reducing government tax collection, revenue therefore affect Governments must provide public goods and establish trusted institutions. Many peoples could react with the problematic strategy of increasing taxes. This increases the informal economy as an incentive for undertakings which increases dodge taxes; You pay more bribes to protect themselves.

Trust is an important factor that influences tax morale. Governments have a leading role in the process transition. Institutional changes associated with uncertainty.
Institutions to reduce uncertainty by the design of the structure of the interaction. Legal certainty in the political process is obtained as a result. If rules are not formalized, "the player" can spend to argue too much time on the rules and less time competing in productive activities. Strong institutional controls and accountability are deeply rooted control agent opportunism people's certain commits. The rule of law has all agents of the Government be imposed.

In the tax compliance have started literature economists recently, note trust. Taxpayers in trust public officials may tend to be a positive attitude and commitment to the tax system and tax payment which has a positive effect on tax compliance to increase. Institutions find fair and efficient tax payers have a positive effect on the tax morale. Taxes can be seen as a prize for positive government action. If the Government of trustworthily file, may be more willing to taxpayers comply with taxes. Similar to the tax administration, the relationship between taxpayers and Government see as a moral contract, which involves strong emotional bonds and loyalties.

When the Government tries to generate confidence with well-functioning institutions, cooperation can be initiated or increased. Treating taxpayers satisfied with the way and way you are, is also expanded cooperation. If the result was be fair by the Government in taxes paid is judged, is no distress.

Weakness of the legal system is the biggest problem of the transition process. Although it 15 years since the collapse of socialism, judicial weakness left a legal vacuum, it remains still unfilled. Tax morality depends on how satisfied taxpayer are with their public employees and the political system. A higher satisfaction in both cases is significantly correlated with higher tax morale.

Tax administration and Government are forced to change their structures and their relationship with taxpayers in the current political process dramatically. May anti-corruption strategies such as creating standards and high transparency in the conduct of public limit the discretion of public officials and government instruments to improve tax morale. It seems that the Government has strongly, that target to work.

What tools improve tax morale?

Trust could be raised if sub-national Governments receive more fiscal autonomy. A higher fiscal decentralization (local tax autonomy) would have the advantage that citizens can better be met preferences. Decentralization moves the Government closer to the people. Political and fiscal autonomy are therefore key components of the national transitional process.

Certainly, caution should be used when implementing experiences from completely different countries. In addition, such an implementation of instruments takes time.

Such institutions may however help transparency in government spending of tax revenue and help build a tax system, the rights of taxpayers increase.
If taxpayers are not actively integrated in the process of transition, the wheel may reduce morale.

Income tax is a good tool for a local tree.
Interestingly the literature shows that social-demographic factors tax affect morale. Getting older, morality has a positive effect on the tax. Women report clearly higher tax morality than men.

Married people have a tendency to higher taxes morality as singles. Self-employed have lower taxes moral as full-time employees. This fact surprised, especially when faced with self-employed are not, and by high transaction costs charged by inefficient government activities limited.