Posted on 10 August 2019
A periodic estimate called Voluntary Compliance Rate(VCR) is done by the Internal Revenue Service(IRS) to get an estimate of timely and voluntary payment of taxes which also helps to analyze the impact of non-filing, underreporting, and underpayment. The current VCR is at its peak at 81% to 84%.
According to the sources from the US treasury, the compliance rate of Germany is 68% and the compliance rate of Italy is 62%. The highest tax compliance rate was reported to be of the General Authority of Zakat and Tax(GAZT) in Saudi Arabia. The authority reported a whopping compliance rate of 95%.
On being asked about achieving such a high compliance rate GAZT replied that it is a result of awareness programs that they introduced. GAZT consistently published information on its website, conducted seminars, workshops to educate the taxpayers.
However, the VCR is not a very effective way to draw the comparison because of the variation in the number of registered taxpayers and tax compliance policies.
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