Enhancing compliance: the role of rewards and motivation in China’s tax system

This study aims to explore the role of tax rewards and motivation in the tax compliance behaviour of individuals in China and examine the preferred form of tax rewards that enhances tax compliance behaviour. Data were collected using a survey questionnaire from 301 individuals in Guangdong Province and Beijing City, China. This quantitative study reveals that tax rewards have a positive effect on promoting tax compliance among individuals. Among the three forms — receipt lottery, tax deduction, and public acknowledgement—tax deduction has the most substantial positive impact on tax compliance behaviour. Public acknowledgement also positively affects tax compliance, although its influence is weaker compared to the other two forms of rewards. Meanwhile, both extrinsic motivation and intrinsic motivation can enhance an individual’s tax compliance. According to the sample data collected in this study, it appears that individual taxpayers in China currently respond more sensitively to external tax rewards. Based on specific data from China’s current situation, it offers valuable insights for Chinese tax policymakers.

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