Andre J. Hartmann, Katharina Gangl, Matthias Kasper, Erich Kirchler, Martin G. Kocher, Martin Mueller, Axel Sonntag
The economic crisis during the COVID-19 pandemic has a negative effect on tax compliance: Results from a scenario study in Austria, Journal of Economic Psychology, Volume 93, 2022, 102572, ISSN 0167-4870,
Publication year: 2022

In a scenario study with 1200 Austrian taxpayers, we examined how tax compliance is affected by the economic crisis related to the COVID-19 pandemic. Moreover, we investigated the potential of
trust in government, attitude towards taxes, and justice perceptions in mitigating potential effects. The results suggest a strong effect of the economic environment on tax compliance. Specifically, tax compliance was lower in scenarios where the pandemic had a negative effect on the economy than in scenarios with no negative effect. However, for individuals with a positive attitude towards taxes, compliance was not lower in a negative economic environment than in pre-COVID-19 times. Moreover, we found that taxpayers who were not affected economically, taxpayers with a positive attitude towards taxes, and taxpayers with a low propensity to take risks generally indicated higher levels of tax compliance. Exploratory analyses indicate that taxpayers who change their compliance behavior in response to the economic environment are, on average, younger, less educated, more strongly affected economically, and more uncertain about their current economic situation than taxpayers with stable compliance levels. Policy interventions should target these groups to strengthen tax compliance in times of crisis.