The Research On Tax Evasion And Its Prevention

Tax Evasion's Prevention is a permanent research topic in taxation theory circle and taxation department. In the situation of information asymmetry, as long as taxation exists, tax evasion would occur for the sake of taxpayers' own benefit. Especially in the universally introduced model of declared taxation system by people-selves, tax evasion has become a global difficult problem. The main task of tax control is to guide against and punish tax evasion, it has important theoretical value and intended meaning to study tax evasion's prevention.On the basis of discussing tax evasion's prevention related theories, this article analyzes psychological factors, environmental factors, taxation factors, and collection factors which affect tax evasion, puts forward countermeasures and suggestions to avoid tax evasion by using foreign effective experience for reference. The article falls into 6 chapters. Chapter one is an introduction, which elaborates on the background and significance to choose the topic, introduces research results at home and abroad, and presents main innovative results in this article. Chapter two summarizes theoretical basis of analyzing tax evasion's prevention, introduces analysis of Expected Utility Theory, game analysis on Tax Collection, Prospect Theory, and Tax Control in Institutional Economics. Chapter three analyzes psychological and social environment of tax evasion, introduces Tax Compliance Theory; in the analysis of psychology, the author recommends major psychological factors of tax evasion and mental difference in different kinds of tax evasion; in environmental analysis of taxation by law, the author emphasizes administrative interference and mass basis of tax assistance and protection. Chapter four analyzes tax evasion effected by tax system and collection, taxation setting and evaluation standard in tax collection; in the discussion of taxation setting, the author analyzes the limitation on taxation setting and current tax system which induces tax evasion; in the discussion of tax system, the author analyzes tax collection model, collection means, collection quality, collection force and etc. that effect tax evasion. Chapter five exposes experience of tax evasion's prevention in some countries, general experience to avoid tax evasion in developed and developing countries, and analyzes the experience for reference. Chapter six proposes countermeasures on tax evasion's prevention, including selection on tax collection strategy, improvement on tax system and tax collection environment.In this article, the discussion of basic theory follows the logical path "static analysis of profiteering nature in tax evasion - dynamic analysis of profiteering nature in tax evasion - risk psychological analysis in tax evasion - influence analysis of social environment in tax evasion", which summarizes Expected Utility Theory, game analysis on tax collection, Prospect Theory, analysis of tax control in Institutional Economics, and makes brief comments based on the basic theory mentioned above.Tax evasion mental has great influence on tax evasion's decision making. Throughthe investigating and summarizing of taxation controlling practice, this article obtainseight kinds of major psychology to evade tax payment in China, includingtaxpaying-dislike mind, fluke mind, mass-following psychology, "Tax Evasion is notstolen" mind, promote psychology, self-manifestation psychology, "Small Evil Do NotHarm" mind, psychology to seek private gain at public expense, then classifies differentkinds into state-owned enterprises, private enterprises, foreign-funded enterprises,individual-owned business to illustrate tax evasion. For state-owned enterprise, theyhave the mentality of hitting policy edge ball, "rotten meat in the pot", reasonable taxevasion while evading tax payments; for private enterprises, they have the mentality ofprofiteering and fluke; for foreign-funded enterprises, their tax evasion's behavior isaffected by domestic investor, they usually follow domestic investors to evade taxpayments, and have the mentality "do in Rome as Rome does" ; for individual-ownedbusiness, they want to light tax duty to support family and compete with other business,which induce tax evasion.Social environment also plays an important role in tax evasion. This article emphasizes the motive for government to interfere tax law enforcement and legality on tax administration influenced by government officials' privilege, the author believes that current achievement view to some extent induces the interfere tax law enforcement, such as assigning taxation task layer upon layer and some special preferential policies to attract business, this article points out that our society has influenced by feudalist "rule by man and Confucianism" thoughts long, tax authority is not appropriated to refuse party or government departments to interfere tax law enforcement, while the abuse of authority further encourages the behavior of interference on tax law enforcement. Human relationship would be the greatest barrier on controlling tax by law in China, there is before us a heavy responsibility and a long way to go. Moreover, the ignorance on legal responsibility in tax assistance and protection would make the law even more difficult to enforce. The justice of tax evasion accusation is not well accepted would also bring a great difficulty. This article analyzes taxation institution factors from the perspective of tax control, discusses tax evasion induced by taxation institution factors such as tax category choice, tax items setting, tax rate determining and tax preference. Through principle of tax source controllable, the article makes comprehensive analysis on current turnover tax system, income tax system and property tax system. It systemically and comprehensively analyzes the effect of tax collection in tax evasion, including tax collection model, collection means, collection quality, collection method and collection force.In the model of declared taxation system by people-selves, tax evasion is a difficult problem in levying and controlling in countries of the world. Argue round the problem of how to enhance tax compliance, all countries form varieties of experience. From the perspectives of improving taxation, optimizing taxation service, strengthening tax collection and highlighting tax check, each country do with its own features to control tax evasion. For foreign countries, general experience to evade tax payments are tax source monitoring information oriented, powerful tax check and low tax rate oriented tax system; for developed countries, the major experience are high attention to tax source monitoring, classified management, using tax agency, strict taxation by law, practical tax service and perfect Network to assist taxation; for developing countries, the major experience contains Tax Assessment System in Singapore, Green Declaration Form System in Korea, Tax Registration System in Argentina, Information Collection System in Malaysia, Tax Service System in Brazil and Guiding Tax Compliance System in Philippines.According to the limitation of tax evasion's psychology, taxation, tax collection and environment, this article puts forward countermeasures from three aspects: selection and improvement in tax collection strategy, selection and improvement in tax system, improvement in tax collection environment.The improvement on tax collection is as follows: Firstly, according to Principle-agent Theory, optimize tax collection target and form effective incentive and constraint mechanism. Secondly, locate tax collection model according to Expected Utility Theory. Current tax collection model not only emphasizes highlighted check but also highlighted management. In practice, there is a tendency of emphasizing severing management but lighting tax check, so the better tax collection model "Optimize service, Highlight check, Subsidiary management" would take effect. Thirdly, improve tax collection level and institutional tax compliance, for instance, increase the level of taxation managerial information oriented, generalizing fiscal controlling equipment, classified management, enhancing risk management. Fourthly, increase tax check strength and defensive tax compliance, for instance, increase the power of tax check, general survey of tax check, promotion of tax check quality, restriction of check discretionary right.To improve taxation system, the article proposes corresponding suggestions according to tax source controllable theory and the certainty effect, the reflection effect and the isolation effect in Prospect Theory, including careful choice of new tax categories, restoring of tax evasion vulnerability, cancelling or suspending some specific tax, improvement of current tax category, unifying tax system between domestic and foreign investors, relaxing the standard of vat taxpayers, imposing social security tax, extension of tax excluded in price and so on. While discussing suggestions related to tax system improvement, this article points out some original views as well as some paradoxical views, for example, current value-added tax system allows outsourcing duty-free agriculture products to deduct tax using invoice billed by taxpayers themselves, there are obvious defects in this policy, which have induced many tax evasion's major cases. The author believes this do not fit the vat off-price tax system, which should be cancelled to avoid vat tax source becoming uncontrollable.In the consideration of setting up effective incentive and control mechanism among tax levier, taxpayer and tax assistant, this article puts forward countermeasures from the improvement on tax collection environment, tax payment environment and tax assistance and protection, including perfecting tax legal system, forming effective constraints to tax by law; reducing government interference on taxation, establishing good principle-agent relationship; strengthening tax propaganda and education, enhancing taxpayers' tax compliance; promoting tax credit grade evaluation, improving incentive mechanism of taxation by law; guaranteeing the right of taxpayers, eliminating their tax noncompliance; setting up the status of tax bearer, forming the civic consciousness to assist and protect taxation; promoting lottery invoice, establishing incentive mechanism of taxation assistance and protection; building the environment of reporting tax evasion, constructing informal constraints on tax assistance and protection.