Analysis of Voluntary Compliance with Taxes in the Framework of Adam Smith's Taxation Principles

Abstract

As required by a modern understanding of finance, taxes account for a significant portion of governments' revenues to fulfill their economic, financial, and social duties and responsibilities. Therefore, the establishment of a well-functioning taxation system makes it possible for governments to obtain the expected optimum revenues from taxes. The formation of such a functional taxation system is closely related to taxation principles. In fact, the ability to obtain the expected benefits of a taxation system is linked to the extent to which taxation principle influence the taxation system. While taxation principles are significant for the establishment of taxation systems on a solid basis, voluntary compliance with taxes is crucial for raising the optimal revenue from such a system. Attaining tax compliance is among the most important tax-related problems in all countries in the world. Although taxation is a social phenomenon, it is a psychological phenomenon for the taxpayer who is responsible for taxes. Within this context, governments need to emphasize taxation principles while creating taxation systems and to foreground voluntary tax compliance for the generation of optimum revenues. The present study examines voluntary tax compliance in the province of Kocaeli within the scope of Adam Smith's taxation principles. The study found that the "principle of efficiency" is the most significant canon encouraging individuals to comply with taxes voluntarily whereas the "principle of fairness" triggers reluctance against taxation this article, the authors aim is to identify and evaluate the suggested model of the Manifesto and the Treaty on the Democratization of Europe.

Keywords

• tax
• taxation
• tax compliance
• taxation principles