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An Agent-Based Model Of Tax Compliance: An Application To The Spanish Case

Author

Listed:
  • TONI LLACER

    (Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain)

  • FRANCISCO J. MIGUEL

    (Laboratory for Socio-Historical Dynamics Simulation (LSDS), Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain)

  • JOSÉ A. NOGUERA

    (Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain)

  • EDUARDO TAPIA

    (Analytical Sociology and Institutional Design Group (GSADI), Department of Sociology, Universitat Autònoma de Barcelona (UAB), Cerdanyola del Vallès, Barcelona 08193, Spain)

Abstract

In this paper, we present a new agent-based model for the simulation of tax compliance and tax evasion behavior (SIMULFIS). The main novelties of the model are the introduction of a "behavioral filter approach" to model tax decisions, the combination of a set of different mechanisms to produce tax compliance (namely rational choice, normative commitments and social influence), and the use of the concept of "fraud opportunity use rate" (FOUR) as the main behavioral outcome. After describing the model in detail, we display the main behavioral and economic results of 1,920 simulations calibrated for the Spanish case and designed to test for the internal validity of SIMULFIS. The behavioral outcomes show that scenarios with strict rational agents strongly overestimate tax evasion, while the introduction of social influence and normative commitments allows to generate more plausible compliance levels under certain deterrence conditions. Interestingly, the relative effect of social influence is shown to be ambivalent: it optimizes compliance under low and middle deterrence conditions, but not when deterrence is made harder. Finally, SIMULFIS economic outcomes are broadly in line with theoretical expectations, thus supporting the reliability of the model.

Suggested Citation

  • Toni Llacer & Francisco J. Miguel & José A. Noguera & Eduardo Tapia, 2013. "An Agent-Based Model Of Tax Compliance: An Application To The Spanish Case," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 16(04n05), pages 1-33.
    • Handle: RePEc:wsi:acsxxx:v:16:y:2013:i:04n05:n:s0219525913500070
    DOI: 10.1142/S0219525913500070
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    References listed on IDEAS

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    1. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742, January.
    2. Halla Martin, 2012. "Tax Morale and Compliance Behavior: First Evidence on a Causal Link," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-27, April.
    3. Bicchieri,Cristina, 2006. "The Grammar of Society," Cambridge Books, Cambridge University Press, number 9780521574907, September.
    4. Andreas Diekmann & Wojtek Przepiorka & Heiko Rauhut, 2015. "Lifting the veil of ignorance: An experiment on the contagiousness of norm violations," Rationality and Society, , vol. 27(3), pages 309-333, August.
    5. Benno Torgler, 2007. "Tax Compliance and Tax Morale," Books, Edward Elgar Publishing, number 4096.
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    Cited by:

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    2. V.A. Molodykh, 2021. "Impact of Short-Term Exogenous Shocks on Taxpayer Behavior and Tax Evasion," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 241-268.
    3. Feng Xiong & Shaojie Xiang & Peng Jin, 2019. "Study On Computational Experiments Of C2c Tax Compliance Based On Information Of Cybermediaries," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 22(02), pages 1-29, March.

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