Academic literature on the topic 'Tax compliance benefits'
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Journal articles on the topic "Tax compliance benefits"
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Mills, Lillian F., Leslie A. Robinson, and Richard C. Sansing. "FIN 48 and Tax Compliance." Accounting Review 85, no. 5 (September 1, 2010): 1721–42. http://dx.doi.org/10.2308/accr.2010.85.5.1721.
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ABSTRACT: We develop a model to examine the effects of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), on the strategic interaction between publicly traded corporate taxpayers and the government. Several of our findings contradict conjectures voiced by members of the business community regarding the economic effects of implementing FIN 48. Specifically, taxpayers with strong facts obtain higher expected payoffs from uncertain tax benefits and some disclosed liabilities understate the expected tax liability. Consistent with the common conjectures, however, some taxpayers are more likely to be audited or are deterred from entering into transactions that generate uncertain tax benefits because of FIN 48.
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Forlines, Grayson L., S. Andrew Martin, Valerie Keathley, Jerry Kissick, and Jennifer Walton. "Estimating Benefits of Automated Commercial Vehicle Enforcement." Transportation Research Record: Journal of the Transportation Research Board 2673, no. 10 (May 12, 2019): 25–34. http://dx.doi.org/10.1177/0361198119849574.
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Automated enforcement of commercial vehicle regulations is one potential method through which states can generate revenue and improve safety compliance by more efficiently directing the attention of law enforcement and state Department of Transportation (DOT) officials to non-compliant carriers and identifying carriers who may be evading taxes. This paper estimates the potential benefits of remote enforcement of weight–distance tax regulations in Kentucky, United States (U.S.) using data from camera-equipped Kentucky Automated Truck Screening (KATS) systems and PrePass weigh stations in Kentucky, and links these data sources with administrative tax returns and Kentucky State Police citation data. This research estimates that remote enforcement and identification of tax evaders could generate up to $10.4 million annually in revenue. Implementation of KATS weigh stations increases monthly impounds by approximately $5,000 per station, or about 160%. Overall, the results indicate that remote enforcement can assist state DOTs and law enforcement agencies targeting non-compliant carriers and may be an effective tax enforcement tool for states.
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AKSENOVA, A. A., and I. E. KONOVALENKO. "TAX COMPLIANCE CONTROL AS A TOOL TO PROTECT AGAINST TAX RISKS." EKONOMIKA I UPRAVLENIE: PROBLEMY, RESHENIYA 4, no. 4 (2021): 78–85. http://dx.doi.org/10.36871/ek.up.p.r.2021.04.04.014.
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The article discusses the importance of tax compliance control as one of the tools to protect entrepre-neurs from tax risks. The article presents different points of view of modern economists who study the role of compliance control in organizations, as well as justifies the need and describes the possible benefits of im-plementing this system.
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Williams, Colin. "Evaluating Public Administration Approaches towards Tax Non-Compliance in Europe." Administrative Sciences 10, no. 3 (July 14, 2020): 43. http://dx.doi.org/10.3390/admsci10030043.
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Those engaging in tax non-compliance have been conventionally explained as rational economic actors partaking when the benefits outweigh the costs, and thus public administrations have sought to enforce compliance using a deterrence approach which increases the risk of detection and penalties. However, many have been found to not engage in tax non-compliance when the benefits exceed the costs. The result has been the emergence of a voluntary compliance approach viewing taxpayers as social actors who engage in tax non-compliance when there is a lack of vertical trust (in governments) and horizontal trust (in others). Using a probit regression analysis of data from special Eurobarometer surveys conducted in 2007, 2013 and 2019, the finding is that although the likelihood of participating in tax non-compliance is largely not associated with the level of penalties and risk of detection, it is significantly associated with the level of vertical and horizontal trust, with participation in tax non-compliance increasing with lower vertical and horizontal trust. The implications for theory and for how public administrations tackle tax non-compliance are then discussed.
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De Simone, Lisa, Richard C. Sansing, and Jeri K. Seidman. "When are Enhanced Relationship Tax Compliance Programs Mutually Beneficial?" Accounting Review 88, no. 6 (June 1, 2013): 1971–91. http://dx.doi.org/10.2308/accr-50525.
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ABSTRACT: This study investigates the circumstances under which “enhanced relationship” tax-compliance programs are mutually beneficial to taxpayers and tax authorities, as well as how these benefits are shared. We develop a model of taxpayer and tax authority behavior inside and outside of an enhanced relationship program. Our model suggests that, despite the adversarial nature of the relationship, an enhanced relationship program is mutually beneficial in many settings. The benefits are due to lower combined government audit and taxpayer compliance costs. These costs are lower because taxpayers are less likely to claim positions with weak support and the government is less likely to challenge positions with strong support inside the program. Further, we show that an increase in the ability of the tax authority to identify uncertain tax positions makes an enhanced relationship tax-compliance program more attractive to both the taxpayer and the tax authority. JEL Classifications: H26
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Sari, Ramadhani Indah, and Dian Anita Nuswantara. "The Influence of Tax Amnesty Benefit Perception to Taxpayer Compliance." Jurnal Dinamika Akuntansi 9, no. 2 (September 20, 2017): 176–83. http://dx.doi.org/10.15294/jda.v9i2.11991.
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This study aims to examine the effect of tax amnesty benefits perceived on This study aims to examine the effect of tax amnesty on taxpayer compliance on service quality as a moderating variable. The population in this study is the people who follow the tax amnesty in Surabaya is 58,415 individual taxpayers registered in KPP Pratama Surabaya. The sampling technique chosen was judgmental sampling with slovin formula obtained 100 samples. This study was analyzed using partial least square with path analysis model. The results of this study indicate that the benefits of tax amnesty are perceived to affect tax compliance that service quality cannot moderate the relationship between the two. The conclusion in this research is the Taxpayer already feel confident will be abolished taxes that should be owed because they feel watered down and because get tax relief to be more obedient. Good service quality has been done by the Government and fiscal, but with the existence of taxpayer surge that follow the program Amnesty Tax in the last days so that makes Taxpayers feel less comfortable with the services that have been given.
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Tantio Dharma, Maya, and Stefanus Ariyanto. "Analisis Faktor-Faktor yang Memengaruhi Tingkat Kepatuhan Wajib Pajak Orang Pribadi di Lingkungan Kantor Pelayanan Pajak Pratama, Tigaraksa Tangerang." Binus Business Review 5, no. 2 (November 28, 2014): 497. http://dx.doi.org/10.21512/bbr.v5i2.1008.
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Tax collection is not an easy matter. Active participation from the tax authorities also requires the willingness of the taxpayer. A public reaction can be seen from the taxpayer’s willingness to pay taxes. Willingness and awareness to pay taxes represent a value contributed by someone (which has been determined by regulation). Tax is used to finance public expenditures without any direct benefit. Taxpayer’s awareness about taxation functions as state funding is needed to improve tax compliance and to determine the level of tax compliance in implementing their tax obligations. Limitation of the scope of this study is the effect of the level of awareness of paying taxes, taxpayer’s understanding about tax benefits, tax penalties, and understanding of service quality to the tax authorities of individual taxpayer compliance in the fulfillment of tax obligations, as well as restricted to data obtained through questionnaires received and filled by the individual taxpayer of Tigaraksa Pratama Tax Office area. Data were obtained through questionnaire and processed and analyzed using parametric statistical tests and multiple linear regression with 4 independent variables and one dependent variable resulted in the conclusion that the factors that most influence taxpayer compliance in carrying out its tax liability is the use of sanctions against taxpayers who do not carry out its obligations under applicable legislation.
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Trivedi, Viswanath Umashanker, and Amin Mawani. "Impact of Tax Advisers and Corrupt Tax Auditors on Taxpayer Compliance." Canadian Tax Journal/Revue fiscale canadienne 68, no. 3 (October 2020): 801–32. http://dx.doi.org/10.32721/ctj.2020.68.3.trivedi.
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Using two experiments, this study examines taxpayers' decisions on how much income to report in the presence of tax auditors and post-reporting tax advisers, respectively. In the first experiment, we examine taxpayers' compliance in the presence and absence of corrupt auditors. In the second experiment, we examine taxpayers' compliance in the presence of corrupt tax auditors and compare it with their compliance in the presence of tax advisers retained by the taxpayers upon being audited. The bribes sought by corrupt auditors from audited taxpayers are expressed in the form of a percentage of taxes and penalties payable. The sequence of events in the first experiment is as follows: (1) the taxpayer decides what percentage of income to report to the tax authority; (2) the taxpayer finds out whether or not he or she is audited; and (3) the taxpayer pays any unpaid taxes and penalties if audited by a non-corrupt auditor, or decides whether to pay a bribe if the auditor is corrupt. In the second experiment, step 3 is replaced by the taxpayer having to decide whether to bribe the corrupt tax auditor without hiring a tax adviser, or to retain a (dispute resolution) tax adviser in the absence of a corrupt tax auditor to contest the penalties and underreporting of income. Participants' learning from earlier rounds of the experiment can affect their reporting choice in subsequent rounds. The results of our first experiment show that overall taxpayer compliance is reduced in the mere presence of a corrupt tax auditor, even when bribe-seeking may offer no net after-tax monetary benefits to the taxpayers. This demonstrates the corrosive effects of corrupt auditors. Taxpayer compliance declines even further when taxpayers receive net monetary benefits from bribing the corrupt auditor. The second experiment examines whether the involvement of a professional tax adviser increases or decreases the percentage of income reported compared to the baseline compliance in the presence of a corrupt tax auditor. If the tax adviser serves as a gatekeeper and moral authority, the percentage of income reported by the taxpayer client could increase in the presence of a tax adviser. However, if the tax adviser effectively serves to simply override the tax penalties imposed on the taxpayer, the percentage of income reported by the taxpayer client could decrease. Our experimental results show that in the absence of corrupt auditors, tax advisers are better at improving taxpayer compliance compared to the baseline compliance in the presence of a collusively corrupt tax auditor. This suggests that tax advisers do serve as moral gatekeepers for the tax system.
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Ponomareva, Karina A. "Business splitting: compliance with the principle of tax certainty in law enforcement practice." Law Enforcement Review 4, no. 2 (June 30, 2020): 41–48. http://dx.doi.org/10.24147/2542-1514.2020.4(2).41-48.
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The subject. The problems of business splitting, when several new business entities are created on the basis of an existing organization in order to maintain a preferential special tax
regime, are considered in the article.
The aim of this paper is to find out criteria of unjustified tax benefit in the cases concerning
business splitting.
The methodology. The author uses methods of theoretical analysis, particularly the theory
of integrative legal consciousness, as well as legal methods, including formal legal method
and analysis of recent judicial practice.
The main results, scope of application. The problems of assessing the circumstances of cases
involving the application of a business splitting scheme by the taxpayer are inextricably
linked to the assessment of the validity of the tax benefit. According to the author, splitting
schemes should not be considered as tax evasion, but as an abuse of law. In addition, in
order to substantiate the conclusion that a taxpayer has applied a business splitting scheme,
the tax authority must have evidence that will indicate that the taxpayer has committed
deliberate concerted actions together with persons under its control, aimed not so much at
dividing the business as at obtaining an unjustified tax benefit as a result of using such a
scheme. Judicial practice is quite ambiguous.
Conclusions. The author comes to the conclusion that еhe key concept subject to criticism
is the blurred criteria for obtaining tax benefits for taxpayers and the definition of the edge
when it passes into the category of unjustified tax benefit.
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Kurniasi, Dilla, and Halimatusyadiah Halimatusyadiah. "PENGARUH SOSIALISASI PERPAJAKAN, PEMAHAMAN, KEMUDAHAN DAN MANFAAT YANG DIRASAKAN WAJIB PAJAK UMKM TERHADAP KEPATUHAN MEMILIKI NPWP (Study Pada Wajib Pajak UMKM di Kota Bengkulu)." Jurnal Akuntansi 8, no. 2 (June 17, 2019): 101–10. http://dx.doi.org/10.33369/j.akuntansi.8.2.101-110.
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The objective of this research is to prove the influence of the socialization of taxation, understanding of taxation, convenience of taxation and benefits that were felt by UMKM taxpayers against compliance to have NPWP. Data used in this research are primary data that were obtained from questionnaires that distributed to taxpayers. The number of questionnaires distributed were 155 questionnaires, but only 93 questionnaires that could be processed. Data were analyzed by multiple linear regression that using SPSS program. The result of this research showed that the socialization of taxation, understanding of taxation, convenience of taxation and benefits of taxation have positive influence and significant against taxpayers compliance to have NPWP. This research can contribute to KPP Pratama Bengkulu City to increase tax revenue target by collecting taxpayers to have a tax identification number (NPWP). The limitation of this research are on the number of questionnaires that distributed only in several sub-district in Bengkulu City. Therefore, further research is suggested to expand the research areas.Key words: Socialization, Understanding, Taxation, Benefit, Compliance.
Dissertations / Theses on the topic "Tax compliance benefits"
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Lignier, Philip Andre Cyberspace Law & Policy Centre Faculty of Law UNSW. "Identification and evaluation of the managerial benefits derived by small businesses as a result of complying with the Australian tax system." Publisher:University of New South Wales. Cyberspace Law & Policy Centre, 2008. http://handle.unsw.edu.au/1959.4/41018.
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This thesis explores the managerial benefits derived by small business entities as a result of complying with their tax obligations. This is the first study on managerial benefits that considers all federal taxes in the Australian context. While the managerial benefits of tax compliance were first identified by Sandford in the 1980s, there is only limited evidence to date about their perception by business taxpayers and no evidence at all about their actual occurrence. The work undertaken by Sandford together with the findings of empirical research on accounting in small businesses, provide the framework for the development of research hypotheses. With the purpose of testing these hypotheses, the research examines concurrently a sample of small businesses located in a regional area of Australia, and a sample of similar entities located in an external territory of Australia exempt from federal taxes and with minimal tax compliance obligations. The thesis adopts a mixed research method which combines a survey and a case study component from which a number of convergent results emerge. Results show that bookkeeping requirements imposed by tax compliance compel small businesses to upgrade their accounting systems, typically in the form of computerisation. The increased sophistication of the accounting system following this upgrade allows small businesses to derive managerial benefits in the form of a better knowledge of their financial affairs. The study also demonstrates that when small businesses seek the assistance of an accountant to comply with their tax compliance obligations, managerial benefits may be derived in the form of informal business advice and other services that come as a spin-off from tax compliance work. The findings of the research also indicate that a majority of small businesses value positively the accounting information generated as a result of tax imposed record keeping requirements, however further studies are required to establish the extent to which the additional information has a positive effect on decision making. Finally, the study identifies various possible approaches to quantify managerial benefits including a method based on the costs of alternative resources, and a valuation based on what owner-managers would be prepared to pay for the information.
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Smulders, Sharon Ann. "An evaluation of tax compliance costs and concessions for small businesses in South Africa – establishing a baseline." Thesis, 2013. http://hdl.handle.net/2263/37105.
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This study contributes to the body of knowledge on tax compliance costs to small businesses by pioneering research in South Africa on four fronts. Firstly, the study is the first to comprehensively quantify small business tax compliance costs – establishing a baseline against which future research can be benchmarked. Secondly, the study established that small businesses perceive tax compliance benefits to exist, but found that the respondents were generally unable to quantify them. Thirdly, it evaluated the perceived impact of the major small business tax concessions on the level of tax compliance costs incurred by small businesses. Finally, the study used regression analyses to evaluate the drivers or determinants of internal and external tax compliance costs.Thesis (PhD)--University of Pretroia, 2013
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Books on the topic "Tax compliance benefits"
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Office, General Accounting. Tax administration: Information is not available to determine whether $5 billion in liberty zone tax benefits will be realized : report to Congressional Requesters. Washington, D.C: GAO, 2003.
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Office, General Accounting. Tax Administration: Most taxpayers believe they benefit from paid tax preparers, but oversight for IRS is a challenge : report to the Committee on Finance, U.S. Senate. Washington, D.C: GAO, 2003.
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Moeller, Andrea. Small Business Issues: Contracting, Compliance and Tax Benefits. Nova Science Publishers, Incorporated, 2019.
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Jouste, Maria, Milly I. Nalukwago, and Ronald Waiswa. Do tax administrative interventions targeted at small businesses improve tax compliance and revenue collection? Evidence from Ugandan administrative tax data. 17th ed. UNU-WIDER, 2021. http://dx.doi.org/10.35188/unu-wider/2021/951-8.
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This paper conducts an impact evaluation of the effects of two tax administration interventions—a taxpayer register expansion and education programme, and a new electronic filing system for presumptive tax—on the number of small business taxpayers and presumptive tax revenues in Uganda. Using a difference-in-differences approach and administrative data covering both presumptive taxpayers and comparable small corporate income taxpayers, we find that the number of small business taxpayers filing tax returns and presumptive tax revenues increased substantially after the interventions. We argue that the interventions complement each other because both interventions were established around the same years, and the taxpayer register expansion programme focused on not only registering but also educating taxpayers with regard to tax compliance. We analyse the cost-effectiveness of the taxpayer register expansion programme and find that the benefits outweigh the costs.
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Volintiru, Clara. Tax Collection without Consent. Oxford University Press, 2018. http://dx.doi.org/10.1093/oso/9780198796817.003.0010.
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This chapter examines tax collection in pre-modern Romanian provinces. Similar to the other case studies in this volume, legitimacy, the balance of powers, and administrative capacity influence greatly the fiscal and state-building process. Romanian rulers did not seek popular consent, nor did they actively engage in any form of social contract. Taxes were predominantly a burden imposed on behalf of neighboring foreign powers, or exploitative noblemen. Public goods and services were often provided by the Church. This chapter also explains some of the differences between the historical provinces. In the semi-periphery of the Ottoman Empire, fiscal collection was not a priority for the impoverished population, but rather the responsibility of patrimonial rulers. In contrast, social norms and institutional context encouraged fiscal compliance in the urban areas of Transylvania, where a nascent bureaucratic system provided the benefits of predictability and rule enforcement for tradesmen and guild workers.
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Tax administration: Benefits of a corporate document matching program exceed the costs : report to the Chairman, Subcommittee on Commerce, Consumer, and Monetary Affairs, Committee on Government Operations, House of Representatives. Washington, D.C: The Office, 1991.
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Schmidt, Susanne K. The Europeanization Effects of Case Law. Oxford University Press, 2018. http://dx.doi.org/10.1093/oso/9780198717775.003.0007.
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Chapter 7 seeks to summarize what we can learn from different case studies concerning member-state responses to EU case law. Compliance with secondary law requires the implementation of specific policies, but case law cannot make comprehensive policy prescriptions. Instead, it normally prohibits certain member-state policies by declaring them to be in conflict with EU law. There can be no expectation for the one-dimensional impact of case law, I argue. Given that the Europeanization effects of case law have hardly been researched, I give an overview of different responses, structured according to executive, legislative, and judiciary reactions, which are considered alongside the responses from societal actors. In particular, the example of EU citizens’ access to tax-financed social benefits shows how difficult it is for national administrations to translate case-law principles into general administrative procedures.
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Tax administration: Increasing EFT usage for installment agreements could benefit IRS : report to congressional requesters. Washington, D.C: The Office, 1998.
Find full textBook chapters on the topic "Tax compliance benefits"
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Kenworthy, Lane. "Is Its Success Generalizable?" In Social Democratic Capitalism, 72–93. Oxford University Press, 2019. http://dx.doi.org/10.1093/oso/9780190064112.003.0003.
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Abstract: Social democratic capitalism’s chief practitioners have been the Nordic nations: Denmark, Finland, Norway, and Sweden. Skeptics discount the Nordics’ success on the presumption that these nations have some unique feature that allows them, and only them, to reap the benefits of social democratic policies without suffering tradeoffs. Versions of this story identify the Nordics’ secret weapon as an immutable work ethic, superior intelligence, trust, solidarity, small population size, racial and ethnic homogeneity, institutional coherence, effective government, corporatism, a willingness to be taxed, tax compliance, strong labor unions, or low income inequality. I examine these hypotheses. None holds up to close inspection.
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Cnossen, Sijbren. "Why VAT?" In Modernizing VATs in Africa, 1–12. Oxford University Press, 2019. http://dx.doi.org/10.1093/oso/9780198844075.003.0001.
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Chapter 1 shows that in about half of all countries on the African continent, tax revenue as a percentage of GDP (called the tax ratio) is around 15 per cent or less, which is not enough to finance more human and economic development. The instrument for greater domestic resource mobilization is a broad-based consumption tax, such as a VAT. Current VATs, however, are riddled with exemptions, exclusions and zero rates which depress revenue, are highly distortionary and greatly complicate VAT administration. The abolition of exemptions for goods, services, and entities and, more generally, unnecessary design differentiations would reduce the weight and sway of legal opinions and increase the administrative resources available for monitoring compliance with the VAT. Revenue should benefit.
Reports on the topic "Tax compliance benefits"
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Bennett, Fran, Jonathan Shaw, and Mike Brewer. Understanding the compliance costs of benefits and tax credits. Institute for Fiscal Studies, July 2009. http://dx.doi.org/10.1920/re.ifs.2009.0070.
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Rukundo, Solomon. Tax Amnesties in Africa: An Analysis of the Voluntary Disclosure Programme in Uganda. Institute of Development Studies (IDS), December 2020. http://dx.doi.org/10.19088/ictd.2020.005.
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Tax amnesties have taken centre stage as a compliance tool in recent years. The OECD estimates that since 2009 tax amnesties in 40 jurisdictions have resulted in the collection of an additional €102 billion in tax revenue. A number of African countries have introduced tax amnesties in the last decade, including Nigeria, Namibia, South Africa and Tanzania. Despite their global popularity, the efficacy of tax amnesties as a tax compliance tool remains in doubt. The revenue is often below expectations, and it probably could have been raised through effective use of regular enforcement measures. It is also argued that tax amnesties might incentivise non-compliance – taxpayers may engage in non-compliance in the hope of benefiting from an amnesty. This paper examines the administration of tax amnesties in various jurisdictions around the world, including the United States, Australia, Canada, Kenya and South Africa. The paper makes a cost-benefit analysis of these and other tax amnesties – and from this analysis develops a model tax amnesty, whose features maximise the benefits of a tax amnesty while minimising the potential costs. The model tax amnesty: (1) is permanent, (2) is available only to taxpayers who make a voluntary disclosure, (3) relieves taxpayers of penalties, interest and the risk of prosecution, but treats intentional and unintentional non-compliance differently, (4) has clear reporting requirements for taxpayers, and (5) is communicated clearly to attract non-compliant taxpayers without appearing unfair to the compliant ones. The paper then focuses on the Ugandan tax amnesty introduced in July 2019 – a Voluntary Disclosure Programme (VDP). As at 7 November 2020, this initiative had raised USh16.8 billion (US$6.2 million) against a projection of USh45 billion (US$16.6 million). The paper examines the legal regime and administration of this VDP, scoring it against the model tax amnesty. It notes that, while the Ugandan VDP partially matches up to the model tax amnesty, because it is permanent, restricted to taxpayers who make voluntary disclosure and relieves penalties and interest only, it still falls short due to a number of limitations. These include: (1) communication of the administration of the VDP through a public notice, instead of a practice note that is binding on the tax authority; (2) uncertainty regarding situations where a VDP application is made while the tax authority has been doing a secret investigation into the taxpayer’s affairs; (3) the absence of differentiated treatment between taxpayers involved in intentional non-compliance, and those whose non-compliance may be unintentional; (4) lack of clarity on how the VDP protects the taxpayer when non-compliance involves the breach of other non-tax statutes, such as those governing financial regulation; (5)absence of clear timelines in the administration of the VDP, which creates uncertainty;(6)failure to cater for voluntary disclosures with minor errors; (7) lack of clarity on VDP applications that result in a refund position for the applicant; and (8) lack of clarity on how often a VDP application can be made. The paper offers recommendations on how the Ugandan VDP can be aligned to match the model tax amnesty, in order to gain the most from this compliance tool.
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Megersa, Kelbesa. Tax Transparency for an Effective Tax System. Institute of Development Studies (IDS), January 2021. http://dx.doi.org/10.19088/k4d.2021.070.
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This rapid review examines evidence on the transparency in the tax system and its benefits; e.g. rising revenue, strengthen citizen/state relationship, and rule of law. Improvements in tax transparency can help in strengthening public finances in developing countries that are adversely affected by COVID-19. The current context (i.e. a global pandemic, widespread economic slowdown/recessions, and declining tax revenues) engenders the urgency of improving domestic resource mobilisation (DRM) and the fight against illicit financial flows (IFFs). Even before the advent of COVID-19, developing countries’ tax systems were facing several challenges, including weak tax administrations, low taxpayer morale and “hard-to-tax” sectors. The presence of informational asymmetry (i.e. low tax transparency) between taxpayers and tax authorities generates loopholes for abuse of the tax system. It allows the hiding of wealth abroad with a limited risk of being caught. Cases of such behaviour that are exposed without proper penalty may result in a decline in the morale of citizens and a lower level of voluntary compliance with tax legislation. A number of high-profile tax leaks and scandals have undermined public confidence in the fairness of tax systems and generated a strong demand for effective counteraction and tax transparency. One of the key contributing factors to lower tax revenues in developing countries (that is linked to low tax transparency) is a high level of IFFs. These flows, including international tax evasion and the laundering of corruption proceeds, build a major obstacle to successful DRM efforts. Research has also identified an association between organisational transparency (e.g. transparency by businesses and tax authorities) and stakeholder trust (e.g. between citizens and the state). However, the evidence is mixed as to how transparency in particular influences trust and perceptions of trustworthiness.