Tax avoidance and tax evasion: current insights and future research directions from an emerging economy

Abstract

Purpose – This study aims to identify factors affecting tax avoidance and tax evasion in Bangladesh and propose a future research agenda. Design/methodology/approach – This paper reviewed 423 articles published between 2010 and 2023 using a systematic literature review (SLR) approach. Findings – The review classified the factors into three categories, namely individual taxpayers, corporate taxpayers and tax administration. Income level, tax penalty, tax morale, inefficient tax return system and tax assessment process are associated with the individual’s tax avoidance and tax evasion activities. Profitability, corporate governance and financial restrictions are key factors influencing corporate taxpayers’ involvement in tax avoidance and tax evasion. Factors related to tax administration include lack of social interaction, distrust of national officials, complexities of policies, politicisation of tax authority, lack of political stability, incompetent auditing, insufficient recording, lack of administrative cooperation, lack of accountability, insufficient counselling and compromising in tax prosecution cases. Practical implications – This paper provides tax regulators with insights to improve regulations and lessen tax avoidance and tax evasion activities. Originality/value – This paper is the first attempt to provide guidance for academics when examining tax avoidance and tax evasion in Bangladesh.

Keywords

• Tax avoidance
• Tax evasion
• Bangladesh