engleski

TAX LITERACY AS AN INSTRUMENT OF COMBATING AND OVERCOMING TAX SYSTEM COMPLEXITY, LOW TAX MORALE AND TAX NON-COMPLIANCE

Tax literacy presents one of the financial literacy dimensions which refers to possessing specific tax oriented financial knowledge and numeracy skills, required for managing tax calculations. Tax literacy is intended to help individuals receive information about taxes, to explain them taxes within a domestic system as well as regional and international system. The aim of this paper is to stress out that the complexity of the taxation system as well as some other problems like low tax morale and low tax compliance might be combated through promotion and implementation of tax literacy initiatives and programs. By acquiring basic knowledge of taxation and public expenditures, individuals become able to efficiently manage their personal finances and understand the basic logic of possible effects of fiscal policy. On the other side, if individuals are never taught the basic concepts of taxation, and never acquire needed numeracy skills, they might be more prone to problems like indebtedness or non-compliance of their tax obligations. This paper will therefore examine the importance of tax literacy and possible consequences and negative outcomes that might occur due to the low levels of citizens’ tax literacy.

tax literacy; financial literacy; tax morale; tax compliance; tax system complexity; tax terminology; tax calculations; tax law

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