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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* Introduction 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 INTERNATIONAL TAXJOURNAL 33

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