Understanding how education affects students’ attitudes towards tax evasion and tax avoidance in New Zealand. (2021)
Type of ContentTheses / Dissertations
Degree NameMaster of Commerce
PublisherUniversity of Canterbury
Previous scholars have come to conflicting conclusions on the relationship between tax education and taxpayer attitudes towards tax evasion. In addition, the impact of tax education on taxpayers’ tax avoidance attitudes is still unclear. The key purpose of this study is to investigate the impact of tax education on tax evasion and tax avoidance attitudes of New Zealand students. Birch et al. (2003) conducted an earlier study on the tax evasion attitudes of students at the University of Canterbury (UC) and concluded that receiving tax education reduces the tendency of students to evade tax. However, their study did not explain why this relationship exists. Therefore, the current study replicates and expands their study through a mixed methods approach. The questionnaire used in the survey mainly replicated Birch et al.’s (2003) questionnaire to investigate student attitudes towards tax evasion, and the questions concerning tax avoidance in the questionnaire were adapted from Kirchler and Wahl’s (2010) questionnaire. Whether students’ attitudes have changed in the past 18 years is also one of the goals of this research. In addition, follow-up interviews were undertaken with self-selection sampling. The survey results provide a baseline of student attitudes, while the findings of the follow-up explore more deeply their attitudes towards tax non-compliance and the role of tax education in it.
The survey results show that the impact of tax education on student attitudes towards tax evasion is uncertain, and there is no statistically significant impact on student attitudes towards tax avoidance. Compared with non-tax students, tax respondents had a higher acceptance of over-declared deductions and small undeclared cash withdrawals, but a lower acceptance of undeclared cash salary. In addition, more tax respondents believed that, compared with five years ago, the proportion of underreporting income by individuals or small business owners has increased. The interview findings show that tax interviewees felt that their attitudes towards tax evasion and avoidance had not changed much before or after receiving tax education. Nevertheless, the positive correlation between taxation education and taxation knowledge is evident. Tax students are more aware of tax concepts, such as tax evasion, tax avoidance, and tax planning than non-tax students.
In addition, the results of the present study found that compared with 18 years ago, respondents’ acceptance of tax evasion has decreased. However, the proportion of whole respondents who believed that tax evasion in society has risen in the past five years has increased compared with 18 years ago. Moreover, this study did not find that tax education interacts with other demographic variables to affect student attitudes.
Overall, the results of this study show that tax education is helpful to the growth of students’ tax knowledge. Although most tax interviewees believed that their attitudes towards tax evasion and avoidance have changed a little before and after taking tax courses, tax education still plays a role in different tax evasion and tax avoidance behaviours.
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