An Empirical Analysis of Tax Evasion Strategies: A Comparative Study of the Effectiveness Of Different Tax Planning Techniques In Avoiding Tax Obligations

Abstract

Tax evasion is the illegal act of deliberately devaluing one’s taxable income or artificially overestimating expenditures to decrease one’s tax burden. It is an illegitimate determination to minor one’s tax obligation. The research aims to analyze different tax evasion tactics, with a particular focus on how well various tax planning strategies perform to avoid paying taxes. This study investigates the relationship between tax equity perception, tax conformity, penalty severity, tax morale, tax knowledge, tax complexity, tax conformity commitment, and tax evasion strategy utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM). A systematic questionnaire with a Likert scale rating was used to collect data from 400 populations. The measurement model assessed the validity and reliability of latent constructs, while the structural model analyzed the relationship between constructs based on the proposed hypotheses. The structural model revealed that tax equity perception is positively connected to the tax conformity commitment between distinct taxpayers in China. (β = 0.52, p < 0.05), providing well support for hypothesis 1. The result shows there are no significant changes in avoiding tax obligations of various tax planning techniques. The findings show that although some tax planning strategies like income shifting and offshore accounts are highly effective at reducing tax obligations. Finally in this study, we investigate the way different tax planning strategies work to lower tax obligations for both individuals and businesses.