Can e-government initiatives alleviate tax evasion? The moderation effect of ICT

Drawing on modernization and institutional theories, this study tests the association between the digitalization of government services and tax evasion via the moderation effect of information and communication technologies (ICTs). The study?s sample covers the years between 2006 and 2017 and contains 1677 country-year observations. The results of fixed effect analysis indicate that the six proxies for governments? long-term vision and the digitalization of government services all play a significant role in alleviating tax evasion. Moreover, ICT adoption by society and citizens positively moderates the association between the digitalization of government services and tax evasion; that is, the digitalization of government services has a stronger effect on mitigating tax evasion in countries where ICT adoption is higher. The study suggests several implications for leveraging ICT in public service delivery, which may help countries reduce tax evasion and increase tax revenue. Specifically, public authorities should improve e-government structures and e-filing systems to facilitate taxpayers? income tax declarations and payments.