Decreasing Tax Evasion: Effective Use of Lying Aversion

This paper investigates the motivations for people to become lying-averse and explores the possible ways to tackle the tax evasion problem using those motivations. Lying averse people want to consider themselves as honest for their religion, position in the society, and want to be considered as honest for the sake of their reputation (Abeler, Nosenzo, & Raymond, 2019). Taking these into account, four policies to address the tax evasion issue are proposed in this paper. 1. Education System Change to Include Ethics and Taxation 2. Moral Training in Hiring Employees 3. Group Tax Reporting 4. National News and Direct Email Publication of the Names of Tax Evaders All these policies are likely to make taxpayers more lying-averse and reduce their willingness to evade taxes. However, if the government aims to fix the problem not only temporarily, but also to solve it from the root with the least expense, 1. Education System Change in Ethics and Taxation has the strongest potential to change people\u27s attitudes towards lying itself