Dataset on tax evasion in Baghdad, Iraq

Tax evasion remains a significant global challenge, undermining government revenues and intensifying economic inequalities. Understanding the factors driving tax evasion is essential for crafting effective strategies to mitigate it. Among the key determinants influencing tax compliance are deviant culture, weak law enforcement, and administrative corruption.

We adopted specific definitions for the variables under investigation. Tax evasion is defined as the unlawful practice by individuals or entities of avoiding tax obligations, often through methods such as underreporting income, inflating deductions, or concealing funds and their sources. Deviant culture refers to societal norms and behaviors that deviate from accepted ethical standards and may condone actions such as tax evasion. Weak law enforcement is characterized by the inability or unwillingness of legal authorities to enforce laws effectively, leading to higher rates of illegal activities. Administrative corruption involves the exploitation of public offices for private benefit, often reflected in acts such as bribery and favoritism.

These variables are latent constructs, meaning they cannot be directly observed or measured easily. To quantify these constructs, reflective measurement models were developed, relying on observed indicators (items) that represent the underlying constructs. A 7-point Likert-type scale, as detailed in Appendix I, was used to measure these indicators, with responses ranging from 1 (strongly disagree) to 7 (strongly agree) and a midpoint of 4 (neither agree nor disagree).

Primarily, the measurement items related to the deviant culture construct (DC1–DC6) reflect a complex combination of people's attitudes toward corruption, their tendency to engage in illicit activities, the influence of religion on their behavior, their tendencies toward greed, and their perspectives on taxes and tax evasion.

Similarly, the weak law enforcement scale (LE1–LE6) measures various dimensions, such as the effectiveness of investigations, the severity and consistency of punishments, the leniency shown in dealing with offenses, delays in detection and prosecution, and public attitudes toward criminal activity.
The administrative corruption scale (AC1–AC6) comprises six indicators addressing the widespread nature of corruption, the personal benefits received by public officials, the presence of unqualified or incompetent officers, scandals involving government officials, the dynamics of bribery, and issues surrounding the awarding of government contracts.

Finally, the tax evasion construct (TE1–TE6) encompasses six items that capture participants' acceptance of tax evasion, their engagement in morally questionable behaviors related to taxes, perceptions of taxes as being misused or corrupted, dissatisfaction with high tax rates, and their willingness to use bribes to reduce tax liabilities.