Tax policy measures to combat the SARS-CoV-2 pandemic and considerations to improve tax compliance: A behavioral perspective

Author(s)

James Alm, Kay Blaufus, Martin Fochmann, Erico Kirchler, Peter N. C. Mohr, Nina E. Olson, Benno Torgler

Abstract

Governments have taken remarkable measures during the SARS-CoV-2 pandemic in their efforts to safeguard citizens' health and the economy. As a consequence, public debts have reached unprecedented levels, which will require at some point higher taxes. Ensuring that citizens pay these taxes requires consideration of the many factors that will likely affect their tax compliance decisions. In this paper, we reflect from a behavioral-economic perspective the impact of tax policy measures on the perception, evaluation, and behavior of citizens and derive considerations to devise appropriate tax policies to ensure compliance in the future. We start with speculations about citizens' views of governmental restrictions and economic stimulus measures in response to the crisis, we apply these speculations to the acceptance and perceived effectiveness of policy measures on citizens' tax compliance behaviors, and we finish with their likely effect on determinants of tax compliance. Building on the derived insights, we deduce a set of considerations to improve tax compliance – and to generate the necessary tax revenues to deal with the aftereffects of SARS-CoV-2 when the pandemic is under control: communication, transparency and justification of measures, access to support, service provision, audits and penalties in case of free-riding, targeted audits, building social norms of cooperation, consideration of framing effects, development of plans and strategies for the future, and anticipation of hindsight biases.

Organisation(s)

Department of Occupational, Economic and Social Psychology

External organisation(s)

Tulane University, Queensland University of Technology, Gottfried Wilhelm Leibniz Universität Hannover, Freie Universität Berlin (FU), Center for Taxpayer Rights

Journal

Finanzarchiv

Volume

76

Pages

396-428

No. of pages

33

ISSN

0015-2218

DOI

https://doi.org/10.1628/fa-2020-0014

Publication date

2020

Peer reviewed

Yes

Austrian Fields of Science 2012

501029 Economic psychology

Keywords

ASJC Scopus subject areas

Finance

Portal url

https://ucrisportal.univie.ac.at/en/publications/88db1ce8-a12b-4e49-938a-7f949543aaad