Public losing trust in taxes

Only about one-third of taxpayers globally believe tax revenues in their country are being spent for the public good, according to a recent survey.

The survey, released this month by the Association of Chartered Certified Accountants, the International Federation of Accountants and the Organization for Economic Co-operation and Development, found that 52% of the respondents agree that taxes are a contribution to the community rather than a cost (25% disagree, and the rest of the respondents were neutral), but only 33% agree that tax revenues in their country are spent for the public good (with 46% disagreeing). In addition, 32% agree that public services and infrastructure are a fair return for the taxes they pay (50% disagree).

Latin American countries tend to have more negative views on tax than the other countries in the sample, with only 47% agreeing taxes are a contribution, and just 25% agreeing public services and infrastructure are a fair return for the taxes they pay. Respondents in Latin America were also less likely to see tax primarily as a legal issue. 

Those with higher incomes tend to have a more positive view of the tax system, especially in Asia. While 56% of those in Africa and 52% in Asia see tax mainly as a matter of laws and regulation, only 39% of respondents in Latin America did: 45% saw tax as an equal blend of both laws and morals, and 16% as mainly an issue of morals and fairness.

“Trust in tax systems is crucial for sustainable development and prosperity, and the findings of this survey highlight the challenges that many governments across the world face in building it,” said ACCA chief executive Helen Brand, in a statement. “We look forward to using this important work to engage with policymakers, tax authorities and civil society to drive evidence-based policy initiatives to build effective and trusted tax systems.”

Tax accountants are the most trusted source of information on tax, and politicians the least, according to the survey. Trust in sources is not reflected in how frequently they are consulted. For example, social media is the most consulted source in Brazil, despite being the third most highly distrusted.

“Consumer and investor protection is the foundation for economic prosperity, which aligns with building trust in the tax ecosystem,” said IFAC CEO Lee White in a statement. “As the survey confirms, and in line with previous editions, professional tax accountants are the most trusted source of tax information globally. This trust places an enormous responsibility on our profession to act with integrity, to bridge the gap between governments and taxpayers, and to uphold the highest standards of ethics.”

Most people seem to support the fiscal contract in principle, but in many countries they don’t see it working in practice, with 52% of the respondents agreeing their taxes are a contribution to the community and 61% saying it is never acceptable to cheat on tax.

“The findings in this report highlight that support for the fiscal contract remains strong in theory, but it’s not being delivered in practice for many,” said Manal Corwin, director of the OECD Centre for Tax Policy and Administration, in a statement. “We can use these findings to identify how to rebuild trust in both the theory and practice of tax across the globe.”

More people are able to navigate tax compliance than not, but there is still work to do. The culture of tax administration is perceived less positively than the processes.

ACCA, IFAC and the OECD plan to host a webinar on Jan. 28, 2025, in which they will present the key findings of the report.