Description:
Purpose This paper attempts to develop a simple, static model of tax administration that is capable of explaining the widespread collusive petty tax administration corruption observed in developing countries. Design/methodology/approach This paper utilizes a positivist research framework and adopts a theoretical method of analysis, although secondary data will also be mentioned to support theoretical arguments whenever it is appropriate to do so. Findings A high rate of collusive tax corruption is inevitable in developing countries. Research limitations/implications The model is static and needs to be extended into a dynamic model. Practical implications Traditional enforcement tools such as higher audits or a higher penalty regime against tax evasion do not work. Tax simplification can lessen the incidence of tax corruption. Social implications Fighting tax corruption requires significant changes in the attitudes of taxpayers and tax auditors. Originality/value This paper combines the literature on Kantian economics and tax compliance in an innovative fashion.