Research On The Main Factors Affecting Tax Compliance Of High-income Individuals Under Asymmetric Information

This paper attempts to find out the main factors affecting tax compliance ofhigh-income individuals, in the case of the coexistence of multiple influencingfactors,such as,deterrence risks and incentives, economic factors and non-economicfactors, external physical stimulation and internal psychological motivation.The mainconclusions of the study are as follows:1.Based on the summary and comment on various classification of factorsaffecting tax compliance classified by many scholars,this paper reclassified thoserelated factors.As a result of tax compliance is the taxpayers fulfill the degree ofobligations to the government (the agent is the tax authorities) according to the taxsystem, related to three respects:the taxpayers, tax system and government, these threeaspects can be summarized as the following five categories:(1) the taxpayer’s ownfactors,including:①demographic factors:age,gender,educationalstatus and the numberof household members;②psychological factors: tax morale and tax culture.(2)taxsystem,including tax system’fairness,the level of tax burden and tax lawcomplexity.(3)the government factors (tax authorities and other governmentdepartments), including:①deterrence risks:detection rate and penalty rate;②Incentives: level of incentives, efficiency of the public goods’ supply and theservice level of tax authorities.2. According to the survey results of the high-income earners, the paper makes asort of the above five factors and sub-factors of tax compliance using structuralequation model (SEM).(1)As far as the fives factors are concerned, in the low deterrence risks (thedetection rate is10%), the effects of tax compliance’factors in descending order are asfollows: incentives(0.33), deterrence risks(0.24), psychological factors(0.16),taxsystem(0.14),demographic factors(0.10).In the high deterrence risks (the detectionrate is80%), the effects of tax compliance’factors in descending order are as follows:deterrence risks(0.42), tax system(0.26),Incentives(0.20), psychological factors(0.17),demographic factors(-0.06).The impact of demographic factors on tax compliance arenot significant in both cases.(2)As far as the sub-factors are concerned,the factor loading of the sub-factors arethe same in the low deterrence risks and the high deterrence risks.Specific descendingsort is as follows: in the deterrence risks: detection rate,penalty rate; in the incentivesfactor, efficiency of the public goods’ supply, the service level of tax authorities, level of incentives; in the tax system factors, the level of tax burden, tax system’fairness,tax law complexity; in the psychological factors, tax morale, tax culture.3.In order to improve tax compliance of hig-income individuals, the paper putsforward the following suggestions combined with the results of empirical analysis.First, improve the mechanism of deterrent risks.We must not only improve thedetection rate, but also to improve the actual rate of penalty, to establish a powerfuldeterrent mechanism;Second, reshape incentive mechanism.Improve the government’sprovision of public goods, improve the efficiency of the tax authorities service leveland establish the integrity of the tax incentive mechanism; Third, strengthen taxmorale construction.Fourth, make tax system more fairer and reasonable.