Agent-based modelling on tax compliance and nudging strategies

Tax compliance is an important issue in order to increase public revenues in the economy. In this study, tax compliance is modeled on an agent basis with subjective audit probabilities among different occupational groups. Infrequent audits increase tax compliance more than frequent audits, and paying taxes is a sign of national pride, status, etc. It has been concluded that tax compliance increases when we increase the social returns such as While our nudge messages, which were developed by the survey method with the behavioral economics approach based on the model, supported the result we reached in the model, social norm, social exchange and moral nudge messages were more effective in changing taxpayers' tax perceptions. Keywords: Tax Compliance, Agent Based Modelling, Behavioral Economics