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                   and probit to estimate the model and include three   Next,  tax  morale.  Tax  morale  is  a  variable  that
                   independent  variables: government effectiveness   is trying to gauge how much the willingness of a
                   (goveffec), rule of law (rulelaw), and the level of   person  to  pay  tax  liability  that  are  influenced  by
                   democracy  (polity).  Model  specification  that  will   moral values  ethics, and culture. Data on tax morale
                   be tested as follows:                            is  taken  from  the  World  Values  Survey  (WVS).
                                                                    Data  is  a  scale  of  1  (cheating  taxes  altogether
                   Instmodel (1 or 0)                               unacceptable)  to  10  (very  acceptable  tax  fraud).
                                                                    The data from the WVS also used by many other
                   = α + β goveffec + γ rulelaw + δ polity + ε      empirical studies .
                      i   1it       it        it      it
                                                                       In the contecx of tax  morale,  there is no
                      The difference between the logit and probit lies   significant  difference  between  countries  that
                   in the error  distribution. In the  logit model, the   adopt SARA and non-SARA. Taxpayers in the two
                   error distribution is assumed to follow a standard   groups of countries, tend to have the same views
                   logistic distribution; meanwhile, in the probit   on justification in doing tax fraud (see Figure 2).
                   model, the error distribution is assumed to follow a   In other words, the institutional model of the tax
                   normal distribution. Model selection is based more   authority has nothing to do with tax morale.
                   on personal judgment without concrete theoritical
                   aspect. 17                                        Figure 2 - Shadow Economy and Tax Morale in SARA
                                                                           and Non-SARA Countries (2000-2011)
                   4. Some Preliminary Findings                        Shadow Economy         Tax Morale
                      From  the  previous  literature,  SARA  model  is
                   considered as superior and would have a positive   % GDP  25.92          Scale  2.13  2.07
                   impact on the performance of tax collection. In this
                   section, we compare some of the taxation situation
                   in countries that adopt SARA and non-SARA.

                      First,  shadow  economy.  Shadow  economy           SARA  Non-SARA          SARA  Non-SARA
                   data used  in this  article is  based  on calculation
                                                                    Source: tax morale data is from World Values Survey,  various years.
                   by  Schenider,  Buehn  and  Montenegro  (2010).    While, shadow economy data are extracted from Schenieder, Buehn, dan
                                                                    Montenegro (2012).
                   Definition used by them in estimating the amount
                   of shadow economy is the production of goods and
                                                                       The next difference lies in the structure of tax
                   services across the legal market which deliberately
                                                                    revenue in the two groups of countries. From the
                   hidden from public authorities for several reasons:
                                                                    Government  Finance  Statistics  data  released  by
                   (i)  avoid  payment  of  taxes  or  levies;  (ii)  avoid
                                                                    the IMF, the tax structures are grouped into three
                   payment of social security contribution; (iii) avoid
                                                                    general  categories,  namely:  (i)  tax  on  goods  and
                   any over labor provisions or regulations; and (iv)
                                                                    services (refer to VAT, luxury sales, and so on); (ii)
                   efforts to avoid compliance  with  administrative
                                                                    income tax; and (iii) taxes on international trade
                   procedures.  Thus,  research  done  by  Schneider,
                                                                    transactions. 21
                   Buehn  and  Montenegro  (2010)  is  actually
                   considered  to  give  a  more  precise  definition
                                                                       We  found  that  tax  revenue  in  the  non-SARA
                   because it does  not involve criminal or  for any
                                                                    countries has a greater dependence on the type of
                   illegal activity .
                                                                    indirect tax, shown by the ratio of direct to indirect
                                                                    tax  revenue.   This is indicated by the  relatively
                      In countries that adopt SARA, the percentage of
                   shadow economy are fewer (compare to the size
                   of  the  economy),  which  only  amounted  to  25.92   19 Data only available for 2000, 2003, 2008, and 2010. The question
                                                                    rose for the survey: “If there is a chance, would you think that doing tax
                   %.  Meanwhile,  percentage  of  shadow  economy   evasion is permissible or not?”
                   in  countries  with  non-SARA  models  are  at  28.87   20 Benno Torgler, “Tax Morale and Compliance: Review of Evidence and
                   %. The difference between these  two groups is   Case Studies for Europe”, World Bank Policy Research Working Paper No.
                                                                    5922 (2011); Christian Daude, Hamlet Gutierrez, dan Angel Melguizo,
                   essentially not too drastic, but it is important to be   “What Drives Tax Morale?”, OECD Development Centre Working Papers
                   observed (see Figure 2).                         No. 315 (2012); and Recep Tekeli, “The Determinants of Tax Morale: the
                                                                    Effects of Cultural Differences and Politics”, PRI Discussion Paper Series
                                                                    No. 11A-10, (2011).
                   17 For a more detailed explanation of the binary choice model can   21 There is another type of tax, known as social contribution tax.
                   be found in James H. Stock  dan Mark W. Watson.  Introduction to   22 Accroding to Atkinson (1977), direct tax is type of tax that attached
                   Econometrics, 2nd edition. (New York: Addison Wesley, 2007).  to individual characteristics  of  taxpayers; meanwhile,  indirect  tax is
                   18 See Friedrich Schneider, Andreas Buehn, dan Claudio E. Montenegro,   considered  as the type of taxes that bring buyers and sellers. See A.
                   “Shadow Economies All Over the World: New Estimates for 162 Countries   B.  Atkinson,  “Optimal  Taxation and the Direct versus Indirect Tax
                   from 1999 to 2007”, World Bank Policy Research Working Paper No   Controversy”, Canadian Journal of Economics, Vol. 10, No. 4, (1977):
                   5356 (2010).                                     590 – 606.
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