DETERRING ECONOMIC CRIMES - THE CASE OF TAX EVASION

Criminal justice policies and measures for reform almost invariably in clude some aspect of deterrence-based models In their attempt to contr ol crime. It is believed that making the costs of offences more onerou s than the derived benefits will inhibit individuals from committing c rimes. This study explores the utility of deterrence theory for crimin al justice by examining it in the context of tax evasion. Tax evasion is useful in examining deterrence since it occurs in a setting in whic h the conditions for deterrence are most likely to exist. In this stud y, Canadian survey data were examined to gain an understanding of the effect of criminal justice sanctions on tax evasion. Findings suggest that perceived penalties are not as important to decisions about evadi ng talc as are perceptions of the possibility of being apprehended. So me implications of this finding are that strategies of deterrence base d upon penalty size may be ineffective if individuals contemplating ta u evasion do not think they will be caught. This study raises question s about the adequacy of compliance strategies based upon the seventy o f sanctions, and discusses regulatory measures that tie outside of the criminal justice system which may hold more promise.