The Role of Human Factors in Tax Compliance and Countering Tax Crimes

Abstract

This chapter looks at tax crimes from a broader social science perspective complementing the insights gained from legal and doctrinal analysis of tax law in the books. Introducing the difference between law in the books and law in action can produce a better understanding of the role of law in the fight against tax crime. We use the umbrella term human factors to address a wide range of psychological, social, societal, cultural, political, and economic drivers, structures, and mechanisms that affect and are affected by (tax) laws. In this chapter, we draw on the findings of the PROTAX project and analyse several topics related to tax crimes to demonstrate the practical and conceptual use value of an approach to law that looks at human factors and human agency as an integral element. We address problems of tax compliance, tax law enforcement, and tax law policy processes. Reviewing the current state of research in relevant fields, this analysis also reveals gaps in research and raises critical questions regarding the limitation of current frameworks in the investigation of tax crimes. Looking forwards, we hope that our research helps to inspire future efforts to improve empirical and theoretical analysis of tax crimes and contributes to better strategies against these crimes.