The meaning of tax compliance in its most basic form is generally defined as the degree to which taxpayers comply with the tax laws.
There is the question whether ‘compliance’ refers to deliberate or obligatory conduct. In the event that taxpayers ‘agree’ simply because of critical dangers or provocation or both, this would not give off an impression of being a proper compliance regardless of whether 100% of the tax were raised in accordance with the ‘tax gap’ idea of noncompliance. All things being equal, it very well may be contended that effective tax administration expects taxpayers to comply willingly, without the requirement for enquiries, investigations, or the danger of utilization of legal or administrative sanctions. A more suitable definition of tax compliance might therefore be the taxpayers’ ability and willingness to comply with tax laws which are determined by ethics, legal environment and other situational factors at a particular time and place.Read More