Identifying the consequences of tax evasion with a holistic approach: exploratory and confirmatory factor analysis

Tax evasion weakens the government's financial ability to perform its governance duties. Therefore, identifying the consequences of tax evasion can play an important role in better explaining the position of tax in society administration. Therefore, this study attempts to investigate the consequences of tax evasion with a holistic approach and through exploratory and confirmatory factor analysis. The present study is practical in nature and is considered as a descriptive-exploratory correlation study. The required data were collected through questionnaire. The population of this study is the employees of tax administration, economic affairs and Finance, police force and universities of Kurdistan province. Regression analysis and structural equation modeling were used to test the hypotheses and analyze the data. SPSS and Amos software were also used to analyze the data. Based on exploratory factor analysis, 5 components (economic, social, managerial, political and cultural) were identified as the consequences of tax evasion (dependent variable). These five components explain 64% of the variance of the dependent variable. Then, based on the firstorder confirmatory factor analysis, it was ensured that there is a consistency between the theoretical and experimental constructs. In the following, using the second-order confirmatory factor analysis, it was determined that all the latent variables have a positive and significant effect on the dependent variable. The order of their influence was: cultural, managerial, economic, social and political. Finally, the effects of 6 demographic variables (gender, age, education, field of study, years of service and type of organization) on the dependent variable were studied. According to the results obtained, the three variables of age, education and years of service have a positive and significant effect on the dependent variable. Therefore, understanding the consequences of tax evasion can play an effective role in reducing tax evasion.