The importance of tax literacy in tax compliance
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Date
2020
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Abstract
Taxes are the economic values received by the governments and tax authorities under the enforcements according to the rules specified by the law. As tax is the most important source of income of the state, the approaches that strengthen tax awareness and increase tax compliance have become essential for the revenue administrations. Tax literacy is defined as the ability to know and understand the tax-related issues and to interpret them, staying updated regarding the developments and maintaining the personal budget most efficiently while considering the tax payments. This study highlights the importance of tax literacy as one of the factors that determine tax compliance. The study also examines arrangements and projects related to tax literacy in the OECD countries and the United States, along with the presentation of the projects and research related to tax literacy in Turkey. In the study, we conclude that the level of tax literacy in our country is not at the desired level, and thus we provide suggestions regarding the activities that could be conducted to increase tax literacy. © Peter Lang AG 2020.