2. Why is there little tax evasion in Singapore or any other country of your choice? Is it because Singaporeans fear state punishment or because they are satisfied with the performance of the state? Or is there any other explanation? Which explanation(s) do you find most persuasive? Why?
Tax evasion, the illegal negligence in taxpaying and misrepresentation of tax returns to reduce one’s tax liabilities, is at a low level in Singapore. With Singapore’s strong tax enforcement, Singaporeans fear state punishment, deterring them from evading taxes. However Singaporeans’ fear of state punishment is insufficient to explain Singapore having little tax evasion. In an empirical study by Alm and Jackson (1992), higher levels of state punishment
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The tax administration has also been active in educating Singaporeans on tax matters (IRAS, 2007) so that they have no excuse for tax evasion. They are not given the option of feigning ignorance and are compelled to pay their taxes. In addition various schemes introduced by the tax administration manipulate Singaporeans into complying. For example, the Auto-Inclusion Scheme was introduced to allow employers to file taxes for employees (IRAS, 2007). In this manner employees’ say in tax matters is revoked; employees are not even given the option to evade. The underlying coercion mostly goes unnoticed, since employees no longer have to make an effort to pay their taxes. The tax administration’s innovations have caused Singaporeans to think little about the consequences or benefits of evading taxes. They simply pay because it is convenient to do so, without feeling fear or satisfaction. Taxpaying has essentially been assimilated into the lives of Singaporeans – it has become a lifestyle; a quasi-habit. The body has been manipulated, trained and habitualised to pay taxes (Foucault, 1975). Even in the event that any taxpayer consciously decides to break the lifestyle of taxpaying, they will nevertheless be greeted with the strong arm of the law. Taxpayers thereby decide that the lifestyle of taxpaying is best continued.
Singaporeans also do not evade taxes for fear of social ostracisation. In essence, society helps the state compel Singaporeans into involuntary