Artículo

The effect of knowing how tax money is spent and the distance with tax revenue's potential beneficiaries on tax compliance

Paula Arzadun, Ronald Mora-Esquivel, Martín Solís

Abstract


The research questions this study addresses are Would the knowledge taxpayers have about tax money use make a difference in their willingness to comply with taxes? Would a sense of non-geographical distance with tax revenue's potential beneficiaries be effective in reducing tax evasion?; Do tax usage knowledge and geographical distance influence tax compliance indirectly through having a preference for the way the taxes are invested ?; Do tax usage knowledge and geographic distance moderate the effect of a tax rate increment on tax compliance? This study reports on the results of two experimental designs. The first one was a random unrestricted experiment with 175 professionals enrolled in a Business Management Mastering Program. They were situated in a white-collar worker's scenario, where they had to make one decision related to their willingness to comply with taxes. A second experimental game was carried out, with 168 undergraduate students enrolled in different engineering and business management bachelor programs. The results indicate that tax usage knowledge and non-geographical distance influence tax compliance indirectly.


Keywords


Tax compliance; Tax usage; Social distance; Tax recipient

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References


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