PsychoTax

Funding: Excellence funding within the Field of Excellence Smart Regulation

Planned duration: 04/2022 - 03/2023

Project lead: Associate Professor Dr. Barbara Gunacker-Slawitsch (Department of Tax and Fiscal Law) & University Professor Dr. Katja Corcoran (Institute of Psychology)

Cooperating partner: Associate Professor Dr. Robert Rybnicek (Institute for Corporate Management and Entrepreneurship)

Many states are currently working on novel approaches to improve tax enforcement because effective tax enforcement plays an important role in increasing state revenues and conserving government resources. As a part of this effort, modern technologies ‘designed’ in due consideration of current findings in behavioral science have been endorsed. In liberal democracies, however, effective tax enforcement must continue to also rely on active taxpayer compliance. In order to design tax enforcement rules in an effective and efficient way based on a ‘smart regulation’ approach, it is imperative to understand why and under what circumstances taxpayers are willing to comply with their tax obligations. Empirical studies by the OECD focus on large international companies, while in countries such as Austria small and medium-sized enterprises (SMEs) dominate the corporate landscape. Numerous economic studies have been conducted to describe the characteristics and particularities of SMEs. Behavioural economic research and individual psychological studies on taxpayer behavior have not yet been evaluated and assessed with regard to challenges arising for modern tax enforcement in this sector. The aim of this project is to gain clear insights on taxpayer behavior in the SME-sector and to propose measures to (newly) regulate tax enforcement with regard to small and medium-sized enterprises. In this context, it is particularly important to strike a balance between effectiveness and efficiency on the one hand and adequate protection of the individual’s freedom on the other. In concrete terms, the present project aims at exploring options and creating synergies by means of interdisciplinary cooperation. Within the framework of a follow-up project (with an even broader interdisciplinary set-up), further third-party funding shall be acquired to conceptualize an innovative tax enforcement strategy for the SME sector that can be implemented in Austria and serve as an inspiration and a model for other countries.