EDUCATIONAL PURPOSE

1. Evaluating Government
Finance: Balancing Equity,
Efficiency, and
Compliance
JOYCE ANGELA PALIVINO

2. 01
1.Criteria for Evaluating
Government Finance
• Equity
• Efficiency
• Administrative ease.
2. Equity vs. Efficiency
• Efficiency-Oriented
System
• Equity-Oriented
System

3. 1.Tax Compliance and
Evasion
• Understanding Tax
Compliance
• Tax Evasion vs. Tax
Avoidance
Tax Evasion: Illegally failing to
pay taxes.
Tax Avoidance: Legally reducing
tax liability through loopholes or
legal deductions.

4. Drivers of Tax Evasion:
Marginal Tax Rate (MTR):
Higher tax rates increase the
incentive to evade.
Detection Probability:
If people believe they are likely to
be caught, they are less likely to
evade taxes.
Penalties:
Severe penalties for tax evasion
reduce noncompliance.
The Economics of Tax Evasion
• Marginal Benefit of Tax Evasion
• Marginal Cost of Tax Evasion

5. 1.Case Study: Tax
Evasion in the
United States

6. 1.How to Reduce
Tax Evasion

7. THANK YOU