Do Penalties and Enforcement Measures Make Taxpayers More Compliant?—The View of Australian Tax Evaders’

Ken Devos
(Department of Business Law and Taxation, Monash University, Clayton Campus, Melbourne, Victoria 3800, Australia)

Abstract: The tax compliance literature indicates that many factors, including, economic, social, psychological and demographic, impact upon the compliance behaviour of individual taxpayers. This study explores the relationship, if any, that exists between selected tax compliance and demographic variables and the compliance behaviour of Australian individual tax evaders. The study employed a mixed method research approach comprising both a survey and interviews. The findings revealed that tax law enforcement measures and to a lesser degree penalties and detection, did impact upon the compliance behaviour of tax evaders. The study’s results provide useful information for tax authorities and have implications for tax policy development.

Key words: tax penalties; tax enforcement; tax compliance; tax evaders

JEL code: K34