Tax Evasion, Taxation Inspection and Net Tax Revenue: from an Optimal Tax Administration Perspective

Tax evasion has always been an important topic to tax theory researchers and the department of government. However, existing research results are confined to the unilateral action of taxpayers, neglect the interaction between the tax declaration and taxation inspection. This paper, from an optimal tax administration perspective, builds a general equilibrium model, in which, taxation inspection cost, net tax revenue and taxpayers personal expected utility maximization, are included, to analyze the interaction between the tax declaration and taxation inspection. Then it proposes some policies and proposals about taxation inspection.