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Is Tax Education Good or Evil for Boosting Tax Compliance? Evidence from Hong Kong
Author(s) -
Kwok Betty Yuk Sim,
Yip Rita Wing Yue
Publication year - 2018
Publication title -
asian economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.345
H-Index - 28
eISSN - 1467-8381
pISSN - 1351-3958
DOI - 10.1111/asej.12163
Subject(s) - tax credit , compliance (psychology) , public economics , tax reform , tax evasion , indirect tax , economics , double taxation , direct tax , value added tax , tax avoidance , ad valorem tax , position (finance) , government (linguistics) , business , finance , psychology , social psychology , linguistics , philosophy
Whereas some researchers suggest that education fosters tax compliance, others argue that tax knowledge inspires tax evasion. The present study explores whether ‘tax education’ improves tax compliance using data from Hong Kong, given its influential position in East Asia and the government's reliance on taxpayers' voluntary reporting. Taxpayers comply if they are ‘able and willing to’ positively ‘perceive tax system fairness’ and ‘morally’ believe that it is right to comply. Our research model consolidates and empirically tests these factors as underlying channels explaining how tax education improves tax compliance. Being the first study to investigate how tax compliance in Hong Kong is affected by tax education through these channels, our empirical evidence is useful for future researchers and policy‐makers in the region.