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Breaking the Boundaries in the Digital Age: Open Banking and Tax Evasion

Author

Listed:
  • Ngoc Thang Dang

    (Brunel Business School, Brunel University, London UB8 3PH, UK)

  • Stelios Andreadakis

    (Brunel Law School, Brunel University, London UB8 3PH, UK)

  • Pamela Nika

    (Brunel Law School, Brunel University, London UB8 3PH, UK)

  • Monomita Nandy

    (Brunel Business School, Brunel University, London UB8 3PH, UK)

Abstract

In this paper, we examine the relationship between open banking and tax evasion. As the open banking literature is still evolving, we try to systematically analyze the literature on conventional banking and tax evasion and then extend the discussion in the context of open banking. The popularity of open baking recently raises a question about its relationship with tax evasion. Digital banking and digital taxation contributed positively to mitigating tax evasion in the context of conventional banking. However, in open banking, the customers can decide to what extent they will share any transaction-related data with their bank, while they can also choose to complete direct transactions with third parties. This creates a new challenge in relation to the mitigation of tax evasion, which is the focus of this paper. Due to lack of granular empirical data, we conduct a systematic literature review and a bibliometric analysis to track the development of the relevant academic debates and identify the arguments that have been presented in relation to this topic. This approach is recognized as well suited for emerging topics in finance research, particularly when data are scarce, as evidenced by studies on COVID-19 and biodiversity. We find that the gaps of the current regulatory framework, at both the national and supranational level, have created challenges and uncertainties at multiple levels. Nonetheless, the findings of the study suggest future research directions and offer valuable guidelines for regulators in utilizing open banking.

Suggested Citation

  • Ngoc Thang Dang & Stelios Andreadakis & Pamela Nika & Monomita Nandy, 2024. "Breaking the Boundaries in the Digital Age: Open Banking and Tax Evasion," IJFS, MDPI, vol. 12(3), pages 1-27, August.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:3:p:86-:d:1462991
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    References listed on IDEAS

    as
    1. Laura Grassi & Nicolas Figini & Lorenzo Fedeli, 2022. "How does a data strategy enable customer value? The case of FinTechs and traditional banks under the open finance framework," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-34, December.
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    Full references (including those not matched with items on IDEAS)

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