The IUP Journal of International Relations
Tax Obedience in Covid-19 Times:The Case of Israel

Article Details
Pub. Date : Oct , 2022
Product Name : The IUP Journal of International Relations
Product Type : Article
Product Code : IJIR031022
Author Name : Nellie Munin and Karnit Malka-Tiv
Availability : YES
Subject/Domain : Arts & Humanities
Download Format : PDF Format
No. of Pages : 23



Across the world, economic crises present major challenges for governments. In particular, tax agencies encounter emerging compliance problems which in turn adversely affect the economy. In this context, this study aims to explore Israeli taxpayers' willingness to pay tax in the short term, at the beginning of the Covid-19 pandemic. Responses to an anonymous questionnaire reflect a statistically significant correlation between the unwillingness to pay tax and the economic crisis emanating from Covid-19, stronger among citizens who usually avoid paying taxes than those who are usually prompt. It further reflects a link between the willingness to pay taxes and credit shortage, and also that government's reluctance to help the business community during the crisis may reinforce tax avoidance.


Tax payment is a major civil duty in a modern state and broad tax avoidance undermines governance. Tax obedience is affected by several factors, including the overall tax burden and taxes ratio to income, enforcement effectiveness, and taxpayers' understanding and identification with the importance of paying taxes.1

According to literature, in times of severe economic crises, the temptation to avoid tax payments grows. Such an act may involve protest against a government's perceived responsibility for the crisis or its failure to handle it.

The Covid-19 pandemic hit the global economy in early 2020. In Israel, it caused a sharp unemployment increase, from 3.8% in 2019 to 18.2% in 2020. 75,000 businesses ceased to exist2 and even more felt that government help did not suffice.