Abstract
Purpose: This paper aims to examine the relationship
between the level of sustainability and tax evasion and test whether
the level of corruption moderates such a relationship.
Design/methodology/approach: The sample consists of 65 developed and developing countries. Tax evasion is measured using a macro indirect approach used by Schneider et al. (2010). The sustainability level and corruption variables are collected from The Global Competitiveness Report for 2012-2013.
Findings: This study finds that the level of tax evasion is negatively associated with the level of sustainability (overall score and social and environmental score) and the quality of infrastructure. When we distinguish between low- and high-corruption countries, we find that this negative association is significant for low-corruption countries and insignificant for high-corruption countries. These results imply that the level of corruption may reduce the tendency of individuals in a given state to accept and trust their government in general and comply with the tax rules in particular.
Originality/value: Our empirical findings have policy implications for governments with high levels of tax evasion, as they highlight the importance of states’ engagements towards their citizens in reducing tax evasion.
Design/methodology/approach: The sample consists of 65 developed and developing countries. Tax evasion is measured using a macro indirect approach used by Schneider et al. (2010). The sustainability level and corruption variables are collected from The Global Competitiveness Report for 2012-2013.
Findings: This study finds that the level of tax evasion is negatively associated with the level of sustainability (overall score and social and environmental score) and the quality of infrastructure. When we distinguish between low- and high-corruption countries, we find that this negative association is significant for low-corruption countries and insignificant for high-corruption countries. These results imply that the level of corruption may reduce the tendency of individuals in a given state to accept and trust their government in general and comply with the tax rules in particular.
Originality/value: Our empirical findings have policy implications for governments with high levels of tax evasion, as they highlight the importance of states’ engagements towards their citizens in reducing tax evasion.
| Original language | English |
|---|---|
| Pages (from-to) | 328-348 |
| Journal | Journal of Financial Crime |
| Volume | 23 |
| Issue number | 2 |
| Early online date | 1 Mar 2016 |
| Publication status | Published - Mar 2016 |
Keywords
- corruption
- sustainability
- tax evasion
- quality of infrastructure
Access to Document
- HUSSAINEY_cright_8A_Sustainability level, corruption and tax evasion
This article is ©Emerald Group Publishing and permission has been granted for this version to appear here http://eprints.port.ac.uk. Emerald does not grant permission for this article to be further copied/distributed or hosted elsewhere without the express permission from Emerald Group Publishing Limited.