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The impact of bureaucracy, corruption and tax compliance

Ronald D. Picur (College of Business Adminstration, University of Illinois at Chicago, IL, USA)
Ahmed Riahi‐Belkaoui (College of Business Adminstration, University of Illinois at Chicago, IL, USA)

Review of Accounting and Finance

ISSN: 1475-7702

Article publication date: 1 April 2006

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3957

Abstract

Purpose

Tax compliance has been studied by analyzing the individual decision of a representative person between planning and evading taxes. A neglected aspect of tax compliance is the impact of bureaucracy and corruption. Both bureaucracy and corruption are hypothesized to have a negative impact on tax compliance. Aims to examine this issue.

Design/methodology/approach

Based on empirical evidence from 30 developed and developing countries.

Findings

Finds that tax compliance internationally is negatively related to the levels of bureaucracy and positively related to the successful control of corruption. The paper shows that a powerful deterrent is the creation of a tax morale or climate, where citizens are protected from corruption and bloated burequcracies.

Originality/value

The findings are of great value to developing countries that need to reduce both the level of corruption and bureaucracy in order to create the type of tax morale conducive to both tax compliance and economic development.

Keywords

Citation

Picur, R.D. and Riahi‐Belkaoui, A. (2006), "The impact of bureaucracy, corruption and tax compliance", Review of Accounting and Finance, Vol. 5 No. 2, pp. 174-180. https://doi.org/10.1108/14757700610668985

Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited