Maximizing Tax Revenue: The Impact of Tax Planning Implementation on Tax Compliance

Abstract

Tax planning is an essential part of tax management for individuals and businesses to minimize their tax liabilities while complying with the applicable tax laws and regulations. This paper aims to review the existing literature on the impact of tax planning on tax revenue. The findings suggest that tax planning can have a significant influence on tax revenue, as it can result in tax avoidance and tax evasion. However, it is important to note that tax planning is legal and ethical, and when done in compliance with tax laws and regulations, it can contribute to increased tax revenue. Therefore, policymakers need to balance between preventing tax evasion and encouraging tax compliance while ensuring that taxpayers have the opportunity to engage in tax planning to minimize their tax liabilities. This review highlights the need for further research to examine the relationship between tax planning and tax revenue in different countries and contexts. It also emphasizes the importance of improving tax administration and enforcement to reduce tax evasion and increase tax compliance. Overall, this review contributes to the literature by providing insights into the complex relationship between tax planning and tax revenue and identifying areas for future research.