Discussing Tax Evasion and Avoidance in a Unique International Context
The first learning journey under the Supporting Capacity Development of Tax Administrations in South East Europe project was completed on a successful note. The diversity of the participants' country origins allowed for this course to be a one stop avenue for the valuable exchange of country experiences and the latest thinking on approaches and practices used to effectively deal with the challenging and complex issues often encountered by tax administrations when tackling tax evasion and avoidance.
Tax avoidance and evasion are global issues that affect us all. Taxpayers try to minimize taxes through legal or illegal means. At the same time, tax authorities try to improve compliance, detect tax evasion, and close unintended loopholes for legal tax avoidance. The course curriculum, developed and presented by the colleagues from the Dutch Ministry of Finance familiarized participants with different approaches and measures tax authorities can use to effectively combat and reduce the scope of tax evasion and avoidance activities. Possible ways to raise taxpayers’ confidence in the tax system by fostering transparency and improving tax service were also explored. The program was complemented by the research findings on how psychology and economics are related in the analysis of tax compliance.
On the occasion prof. Mittone from the University of Trento explained, “the main literature findings produced by Behavioral Economics about the reasons why people decide to evade are related to the perception of being unfairly treated by Tax Authority and to the perception that avoiding taxes is in some way a widely diffused social attitude. What is more, the two main determinants in favor of an honest behavior are the psychological perception of being with absolute certainty punished (no matter if the punishment takes the form of a fine or of a social blame and independently from the amount of the punishment), and a moral Kantian attitude towards honesty.”
Participants found the presented findings from behavioral economics research that can help tax authorities improve compliance very insightful. They also found working on the case study very relevant and felt it opened floor for more in depth and concrete exchange of thoughts and specific country experiences. Indeed such participant centered activities are closely linked to more effective learning because they require participants to analyze the problem, generate possible alternative solutions to a given problem, actively engage with team members to narrow and refine the proposed solutions and present outcomes to other peer colleagues. The later is an important characteristic of the CEF's understanding and approach to learning.
Throughout the event the discussions were captured also through the use of different social media. To catch a glimpse of the created shared memory during the course please visit our digital story.
The next learning activity under the Supporting Capacity Development of Tax Administrations in South East Europe project will address the role and value of the tax audit program within the compliance risk management process. It will be run on April 21-23, 2015 at the CEF.
About the Supporting Capacity Development of Tax Administrations in South East Europe (SEE) project:
This is a two-year training and networking project that builds on the CEF's training program on taxation carefully linking individual activities into a coherent annual training plan. It is primarily supported by the Dutch Ministry of Finance, Center of Excellence in Finance (CEF), International Monetary Fund (IMF), and Assistance Technique France (Adetef). The overall objective of the project is to contribute to strengthening of beneficiary institutions’ capacity in implementing the EU’s recommendations under which the revenue authorities can deliver tax compliance risk management.
