Tax Evasion

Abstract

The revenue raised for the public purse plays an important role for the functioning of the state. Especially, taxes on personal and corporate incomes are the crucial source of revenues. (OECD, 2016) Corporate taxes, among other revenues, accounted for about 8.8 percent of OECD state income on average in 2014, as analysed from Table 3.12. of Revenue Statistics 2016 (OECD, 2016). Although most of the countries are dependent and levy tax on corporate incomes, they also seek to attract business by offering them lower tax rates. These policy strategies have created loopholes for multinational corporations (MNCs) to avoid paying taxes.