Tax Awareness and Its Impact on Reducing Tax Evasion

A Field Study at the General Directorate of Taxes and State Properties in Erbil, 2023

Abstract

This research aims to discover the impact of the level of tax awareness on the extent of individuals and establishments’ commitment to paying taxes and thus reducing tax evasion. The positive approach was employed to formulate the questions that represent the axes of the exploratory study. The questionnaire was also used and distributed in the field as a tool for collecting study data from a random sample consisting of (52) of those charged with paying the tax, as well as employees of the General Directorate of Taxes and State Real Estate. The study reached several results, the most important of which are: There is a contradiction in the tax system in the Kurdistan Region-Iraq in terms of its high rates and apparent harshness and its modest returns to the state treasury. Of course, widespread evasion comes to explain this contradiction. The results also showed that there is a deficiency in training knowledgeable cadres in tax departments in general in the field of tax evasion and ways to combat it, which is due to the modernity of taxes in their current state in the Kurdistan Region. Also, the backwardness of the accounting and auditing profession and the absence of its effective role, which is a profession of great importance, while it is still backward even compared to neighboring countries and no importance is given to it until now. On the one hand, and practical experiences on the other hand, and based on the above, it was achieved to prove the validity of the hypothesis proposed by both taxpayers and the degree of tax awareness.