ESTIMATION OF TAX EVASION AND THE EFFECTIVENESS OF TAX COLLECTION FOR THAILAND

Janbunjong, Pichit (2009) ESTIMATION OF TAX EVASION AND THE EFFECTIVENESS OF TAX COLLECTION FOR THAILAND. Masters thesis, University of East Anglia.

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Abstract

ABSTRACT
Low tax revenue is an acute problem for the Thai Government, one which causes a lack
of funds for much needed economic and social development. The cause of the low tax
revenue is ineffective tax administration. Thus the purpose of this research was to
measure the tax effectiveness in Thailand.
The review presents the popular Tanzi’s monetary approach for estimating the level of
tax evasion and it has resulted in the hypothesis that tax evasion generally increases
alongside the growth of the economy. However, his approach overlooks two aspects
which reduce the accuracy of the findings: velocity of money and the legal effect of the
tax rate. Thus, in this research, some adaptations were made in order to achieve more
accurate estimation. The model was applied to macro-economic data from sources such
as Bank of Thailand and Eco Win database covering period 1980 to 2006 and results
indicated that tax evasion during this period was probably in the region of 5.5-15%.
Figures suggest firstly that as the economy has grown, tax evasion has reduced, but that
secondly, the least tax evasion occurred during the economic crisis of 1997. The former
finding corresponds to the research by IMD surveys (2005) which showed that highly
developed countries have low tax evasion. The latter finding was tested for structural
break and the results support the view that there is no change in behavior during the
crisis but that the high drop of tax evasion is caused by both the legal and illegal effects
of tax rate.
In addition, another method for estimating tax evasion, Tax Compliance Measurement
Program (TCMP), was applied in measuring the individual tax auditor performance.
This applied method is a good incentive for tax auditors to improve their effectiveness
in detecting more tax evasion.

Item Type: Thesis (Masters)
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Mia Reeves
Date Deposited: 07 Mar 2014 10:07
Last Modified: 07 Mar 2014 10:07
URI: https://ueaeprints.uea.ac.uk/id/eprint/48013
DOI:

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