Improving Tax Literacy and Tax Morale in Young People

Authors: Alexander, P., Balavac, M., Mukherjee, S., Lymer, A. and Massey, D.

Publisher: CIOT

Abstract:

Practitioners, policy makers and academics recognise the importance of addressing low-levels of tax literacy and tax morale in individuals, but the challenge is where to start and what to do. Actions taken by the UK Government, as in other countries, demonstrate a clear belief that taxpayer education should be introduced early and then continuously reinforced and enhanced throughout the lives of their citizens. With Making Tax Digital coming into fruition next year, it is more important than ever that the knowledge gap is assessed and addressed and the place to start is in formal education.

This research for the CIOT looks into the inter-relationships of financial and tax literacy, tax morale and tax compliance attitudes of young people at University. It considers socio-demographic influences and the impact that enhancements to financial and tax literacy may have on young adults’ tax morale (i.e. motivation to pay taxes). It also considers the young peoples’ perceptions of tax compliance and tax administration. In essence, we wanted to know (1) how tax aware are young people, (2) how high are their levels of tax morale and (3) how may their knowledge and morale be improved before they enter the job market.

http://eprints.bournemouth.ac.uk/35081/

Source: Manual

Improving Tax Literacy and Tax Morale in Young People

Authors: Alexander, P., Balavac, M., Mukherjee, S., Massey, D. and Lymer, A.

Publisher: Charted Institute of Taxation

Abstract:

This research considers socio-demographic influences and the impact enhancements to financial and tax literacy may have on young adults’ tax morale. It also considers the subjects’ perceptions of tax compliance and tax administration. The results show that gender, tax tuition, and employment experience influence tax morale. Most of the 377 students surveyed thought the UK tax system is fair, but complex with personal tax rates that are too high. The majority also believe that a significant number of taxpayers cheat by paying less than they legally owe.

The research shows the positive impact of focused tax tuition on university students in raising financial and tax literacy as well as an appreciation for public finance. While the researchers were unable to conclude enhanced literacy resulted in enhanced tax morale in this study, the results nevertheless demonstrated marginal improvements in this regard, thus warranting further research into causation.

The researchers make several recommendations for further initiatives and enhancements to existing programmes in taxpayer education focused on young people before they leave school and enter the job market.

http://eprints.bournemouth.ac.uk/35081/

Source: Manual

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