Tax Compliance and the Choice of an Optimum Strategy for the Economic Agents

Vladimir A. Molodykh, Andrey A.  Rubezhnoy


The strategy analysis of taxpayer behavior while observing tax law requires weakening of traditional initial assumptions in order to take into account the subjective character of economic agents’ reaction to tax system changes. The aim of the given research is to identify the appropriate model of taxpayers’ behavior in conditions of the tax control procedures transformation. The research methodology is based on the synthesis of the neo-classical concept of individual’s rational choice, and on the assumptions of behavioral economics, which allowed considering the problem of tax evasion as the situation of social interaction among economic agents in decentralized system by taking into account their individual interests. The results of modeling demonstrated that tightening tax surveillance procedures undermines the coordination of interaction among autonomous tax groups. It leads to the growth of the possibility to select deviant behavior models. In this case the growth of tax management system efficiency expresses in budget income maximization, and is possible only by means of the extensive development of tax control procedures. The optimal strategy of the government behavior is using multimodal approach based on the partial replacement of control function for the cooperative strategy of tax subjects’ interaction to reduce the natural taxpayer opportunism rate. And as an exceptional measure the harsh sanctions aimed to resist the deviant models of behavior are used. In this case the optimal choice for a taxpayer will depend additionally on the changes of social norms and stereotypes of behavior that characterize the quality of the institutional environment changes


1. Creation of the tax law observance models is necessary to recognize the existence of differentiated reaction to the actions of the state regarding the implementation of control functions. It demands weakening of the main assumptions of a rather rational behavior of economic agents

2. Prevalence of the rigid control function in the system of tax administration leads to the fact that this hierarchical system, which possesses the criterion function connected with maximizing the controllability of the system will never be able to increase the efficiency due to transition to a condition of decentralization

3. Change of tax control forms is possible based on introducing the procedures of “horizontal monitoring” of “a fair play of initiatives”. It increases loyalty and trust by introducing the strategy of cooperation between taxpayers and the bodies of control

For citation

Molodykh V. A., Rubezhnoy A. A. Tax Compliance and the Choice of an Optimum Strategy for the Economic Agents. Journal of Tax Reform, 2017, vol. 3, no. 3, pp. 216–225. DOI:

Article info

Received October 30, 2017; accepted December 1, 2017


behavioral economy, tax compliance, tax evasion, tax policy


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