Tax Evasion

2130 Words Aug 14th, 2013 9 Pages
2. Why is there little tax evasion in Singapore or any other country of your choice? Is it because Singaporeans fear state punishment or because they are satisfied with the performance of the state? Or is there any other explanation? Which explanation(s) do you find most persuasive? Why?
Tax evasion, the illegal negligence in taxpaying and misrepresentation of tax returns to reduce one’s tax liabilities, is at a low level in Singapore. With Singapore’s strong tax enforcement, Singaporeans fear state punishment, deterring them from evading taxes. However Singaporeans’ fear of state punishment is insufficient to explain Singapore having little tax evasion. In an empirical study by Alm and Jackson (1992), higher levels of state punishment
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However Singaporeans have become irrational. They have in effect been duped by the state’s performance to increase levels of voluntary compliance, distracting Singaporeans from the underlying foundational reason (state punishment) that they continue complying, in a pseudo-parallel to the Marxists’ concept of ‘false consciousness’. Singaporeans are kept optimistic about taxpaying, manipulated into believing that they pay taxes not because they are being coerced, but because they want the state to continue performing well. Thereby although Singaporeans’ satisfaction with the state’s performance has attributed to Singapore’s low tax evasion, its underlying principle is not as non-coercive as it may appear to be on the surface. State performance has been used to coerce Singaporeans subtlely.
Subtle coercion is also carried out through the tax administration’s innovations. These innovations supposedly make the lives of Singaporeans easier by aiding them in paying taxes. However it is but a means of manipulating them into paying their taxes to achieve higher compliance. E-filing, or online taxpaying, was introduced to enable taxpayers to file their taxes online, and has seen much success in acquiring tax compliance, with 96% of taxpayers e-filing (IRAS, 2007). Taxpaying is made so convenient that taxpayers do

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