Associations among Procedural Fairness, Tax Compliance, and Tax Re-audits
- Ho-Sung KIM Hyun-Ah LEE
- 한국유통과학회
- The Journal of Asian Finance, Economics and Business(JAFEB)
- Vol. 7 No.7
- 등재여부 : KCI등재
- 2020.07
- 187 - 198 (12 pages)
This study investigates the determinants of the likelihood of a tax re-audit in Korea. It adopts a researcher-administered questionnaire survey method for data collection. The survey questionnaire is randomly distributed to 1,120 individuals with tax-related knowledge and experience. Using a final sample of 342 responses, we conduct a cross-sectional regression analysis to test our hypotheses. The results show that the level of tax non-compliance significantly affects the likelihood of a tax re-audit. This finding suggests that the increase in re-audits in Korea is attributable to the tendency of the tax authority to conduct a re-audit to detect taxpayers’ non-compliance behavior by excessively broadening the scope of re-audits. This study also finds that the level of tax non-compliance is influenced by the perception of procedural unfairness, measured by operational inconsistency and regulatory lack of clarity. Lastly, the results reveal that the level of tax non-compliance mediates the relationship between the perception of procedural unfairness and likelihood of a tax re-audit. This finding indicates that enhancing procedural fairness could fundamentally reduce unnecessary re-audits that infringe on the rights of taxpayers, as the likelihood of a tax re-audit is not solely determined by the level of tax non-compliance but also by perceived procedural fairness.
1. Introduction
2. Literature Review and Hypotheses Development
3. Research Methods
4. Empirical Results
5. Conclusions
References