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39 Int'l Tax J. 33 (2013)
A Study of the Impact of Culture on Tax Compliance in China

handle is hein.journals/intaxjo39 and id is 129 raw text is: May-June 2013

A Study of the Impact of Culture
on Tax Compliance in China
By Daniel Ho, Danny C. K. Ho and Angus Young*

Daniel Ho is an Associate Professor, De-
partment of Accountancy and Law, Hong
Kong Baptist University, Hong Kong.
Danny C.K. Ho is Assistant Professor,
Department of Supply Chain Manage-
ment, Hang Seng Management College,
Hong Kong.
Angus Young is an Assistant Professor,
Department of Accountancy, Hang Seng
Management College, Hong Kong; and
an Adjunct Professor, School of Interna-
tional Law, Southwest Political Science &
Law, China.

China's rapid economic growth in the lasttwo decades
has been nothing short of a miracle. But this was
achieved at a cost. The rapid growth created bottle-
necks in its economic policies, massive fiscal outlays
in capital and intra-structure works placed increasing
pressure on the state's and national treasury. Therefore,
tax has increasingly become a more important part
of China's economic strategy, and yet the issue of tax
compliance has long been neglected because there is
some level of complacency. Perhaps the assumption of
tax authorities in China is that compliance is a given.
Tax compliance is much more complex than many
would assume. It is not simply a matter of top-down or
command-and-control regime where taxpayers obey
the every command or directive of the tax authorities.
Also, tax evasion is not an act of malice or committed
by individuals with intention to defraud tax authori-
ties. Furthermore, while most studies in this field focus
on the economic incentives or socio-psychological
motivations, cultural aspects are often neglected.
This article argues that culture matters because it lies
at the heart of the attitudes and behavioral traits of
individuals. This is not to say there are no critics to the
culture matters thesis. Therefore, empirical evidence
is required to justify such assertions.
This article focuses on individual income tax be-
cause this is where the cultural attributes are most
apparent. This study proposes a conceptual model
of tax compliance based on the salient factors in the
idiosyncratic Chinese institutional and socio-cultural
context.This point was also taken up by Likhovski, who
argued that cultural factors were evident in Palestine
with the inheritance of British tax system transplanted

'2013 D. Ho, D.C.K. Ho and A. Young



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