Weak Enforcement, Strong Deterrence : Dialogues with Chinese Lawyers About Tax Evasion and Compliance


This paper analyses why Chinese lawyers report a high level of perceived deterrence in relation to tax evasion even though enforcement is weak. It finds that deterrence here originates from multiple sources, most directly through clients and more distantly through the firm and the state. Lawyers have highly contextual notions of detection probability and a vague understanding of sanction severity unfitting of the high deterrence found here. In the cases studied, deterrence arises out of a general fear lawyers have of state authorities and clients, as well as through personal morals and social norms in their firm. This shows a broader and deeper approach to deterrence, beyond certainty and severity of punishment for the violation studied, one in which the general perceived risk of such violation is central, whatever its source is.


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