India's tax revenue performance remains sub-optimal despite several tax reforms initiated by the government. One aspect of low tax compliance that policymakers in India have overlooked is the taxpayers’ moral sentiments towards tax payment, which is captured through the tax morale concept. Tax morale helps in explaining why taxpayers voluntarily pay taxes even when standard deterrent factors such as audits or penalties are absent. Therefore, understanding the factors influencing tax morale can help implement appropriate policies to improve tax revenue productivity by better understanding tax compliance behaviour. In this context, this paper aims to examine the factors determining tax morale in India using an independent survey. The results reveal that tax morale in India is shaped by age, participation in groups or associations, employment and income status, level of financial satisfaction, tax burden, trust in government, national pride, efficiency of public spending, and level of corruption.

This study investigates how the two main types of risk-based audits (face-to-face examinations and audits conducted by mail) impact future taxpayer reporting behavior using a large and unique data base that includes granular tax return information as well as risk indicators used for audit selection on audit and comparison samples of self-employed US taxpayers. We employ difference-in-differences estimation with entropy balancing to assess effects on the distribution of reported taxes, as well as mean dollar and percentage changes. We find that face-to-face audits are consistently effective in improving post-audit compliance. However, the impact of audits conducted by mail (correspondence audits) is more nuanced and depends on the timing of the audit. This pattern persists even after controlling for key differences in tax issues subject to examination at different points in the audit cycle, suggesting a need for further investigation into the optimal balance between face-to-face and correspondence audits.