A Research Of The Tax Auditing And Tax Compliance Behavior Of Personal Income Tax

Considering in the the widening income gap in China and the increasingly serious problem of wealth distribution, how to use the policy instrument to promote the redistribution is an important problem which be both concerned by the government and scholars. As an instrument which can redistribute residents' income, narrowing the gap between rich and poor, personal income tax can also stabilize the economy, which has brought to the attention of many countries. However, tax evasion as a co-existence part of taxation, it profoundly influences the redistributive effect of personal income tax and also it is a huge challenge of tax audit system of many countries. First of all, the taxpayer's tax non-compliance behavior may induce serious erosion of government revenues, and lead to the lack of enough funds guarantee for public services and increase the burden of taxpayers who pay the taxes honestly. Secondly, the taxpayer's tax non-compliance behavior will restrict the redistributive effect of personal income tax. In order to improve the redistributve effect of personal income tax on tax collection and administration, reduce the scale of tax evasion and promote the tax compliance behavior of taxpayers, researchers and policy makers pay lots of attention on controlling the tax evasion behavior. In the past few decades, there are many researchs which study the personal income tax collection and administration in developed countries. However, researches on personal income tax system in developed countries is not quite fit to China's situation, there are still many related research blank need to fill. Especially in our country, the personal income tax collection and management problems of research started much later than developed country. And most of the researches are mainly based on the problems arising from the tax work's practical description, and how to improve the personal income tax rate and the final direction of reform, the basic value and theory of the fundamental purpose of reserves is still insufficient.Moreover, although the scholars abroad have developed many taxpayers tax compliance behavior decision-making theory, these theories are not completely fit in the situation in China. The development of personal income tax collection and administration theory in China has a profound theoretical value and practical significance.Firstly, this thesis describes the research background, purpose and significance of this paper. It puts forward the main content of this study and the main innovation points. Then, it expounds and defines some important concepts involved and the related literature at domestic and abroad. Also, it carries on the summary and the review of literature on the basis of further defined in this study in the theoretical research aim and research content. Furthermore, this thesis also shows the present situation of China's personal income tax, tax collection and administration situation.Secondly, this study constructed the estimating regional MIMIC model of underground economy in China. As the underground economy scale can be considered in the calculating of the tax evasion of personal income tax, this research estimates the difference between regional underground economy scale and then calculates the extent of personal income tax evasion from the perspective of "Underground Economy".Thirdly, based on the management situation of personal income tax in China, this thsis extents the expected utility maximization model from the perspective of tax management department. Based on the analysis of personal income tax structure, tax collection and administration situation in China, and consider of the regional personal income tax revenue structure. This thesis analyzes the impact of tax auditing on personal income tax compliance behavior. As same as many foreign scholars' studies, it also finds the level of tax collection and administration can promote taxpayers' tax compliance behavior, reduce the tax loss scale. The empirical analysis results of this study also supports this conclusion. In addition, the results of this paper also suggests that under the current tax structure in our country, the personal income tax, tax collection and administration of the strength and scale of tax evasion is significantly negative correlation.Fourthly, this thesis uses the newly available data from CHIP2007 to analyze the impact of income sources, tax audit rate and other individual characteristics on personal income tax evasion for the tax year 2007 in China. It finds out that wage income, business income and asset income is positively and significantly related to tax evasion of taxpayer. Moreover, the impact of business income on tax compliance behavior is much stronger than wage income and property income. Furthermore, we also find out that the increasing of audit capacity of tax authority leads to lower tax evasion. Based on the results of our study, we make the following recommendations:establishing a comprehensive income tax system based on classification income tax system and strengthen the tax audit capacity on personal income. Especially, tax authority should increase the acquisition and management on the information of business income and property income of taxpayers.Finally, on the basis of above research results, this paper put forward the corresponding policy recommendations, summarizes of the empirical study results and defines the limitations and deficiencies of this research.