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Gaming the System: An Investigation of Small Business Owners’ Attitudes to Tax Avoidance, Tax Planning, and Tax Evasion

1
Business School, University of Exeter, Streatham Court, University of Exeter, Rennes Drive, Exeter EX4 4PU, UK
2
Faculty of Psychology, University of Vienna, Universitaetsstrasse 7, 1010 Vienna, Austria
*
Author to whom correspondence should be addressed.
Games 2019, 10(4), 46; https://doi.org/10.3390/g10040046
Received: 30 August 2019 / Revised: 20 October 2019 / Accepted: 29 October 2019 / Published: 8 November 2019
(This article belongs to the Special Issue Empirical Tax Research and Application)
To a large extent, the body of research that looks at individuals’ compliance with the law focuses on the dichotomy between compliance as rule-following and noncompliance as rule-breaking. However, a fascinating case of noncompliance is that where individuals selectively follow existing rules in order to circumvent the legal principle, this behaviour has been termed ‘creative compliance.’ In the current study, we investigated the psychological underpinnings of ‘creative compliance’ by assessing the attitudes of tax avoidance (significant minimisation of tax liability perceived to be legal) and tax evasion (illegal tax minimisation) of 330 owners of small businesses. We found that tax avoidance and tax evasion were perceived as qualitatively distinct by respondents and that they were predicted by different factors. While both tax avoidance and tax evasion were associated with weak personal norms to contribute to the tax system, tax avoidance was associated with a perception that the tax system is unfair, and that tax law has ‘loopholes’ that can be exploited, while tax evasion was predicted by the perception that evasion is a trivial crime. Overall, we provide insight into the under-investigated behaviour of ‘creative compliance’ and propose future research directions. View Full-Text
Keywords: tax compliance; tax avoidance; tax evasion; tax planning; creative compliance tax compliance; tax avoidance; tax evasion; tax planning; creative compliance
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Onu, D.; Oats, L.; Kirchler, E.; Hartmann, A.J. Gaming the System: An Investigation of Small Business Owners’ Attitudes to Tax Avoidance, Tax Planning, and Tax Evasion. Games 2019, 10, 46.

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