Modeling Tax Evasion in Value Added Tax, A Game Theory Approach

Taxes make up the bulk of any government revenue and provide a sustainable source of revenue. In recent years, the main focus of the tax reform program, in almost all countries of the world, has been on VAT. But a major problem in the effective implementation of VAT, which is a nascent tax base in countries, is the phenomenon of tax evasion. Therefore, one of the most basic steps in preventing tax evasion in the field of VAT is to accurately identify tax interactions between taxpayers and the tax organization based on existing variables and laws. Therefore, in this study, for the first time, the phenomenon of tax evasion in the field of VAT is modeled using the game theory tool and based on the Korchen model in the field of income tax, and is analyzed based on the interactions between taxpayers and the tax organization. The results obtained by mathematical analysis of the developed models indicate that with the integration of VAT audit and Income tax audit, the rate of tax evasion in the field of VAT will be reduced.