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The Social, Economic and Fiscal Effects of Tax Amnesty the Evidence from Kosovo

Article in International Journal of Management Excellence · August 2019

DOI: 10.17722/ijme.v13i2.1099

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 International Journal of Management Excellence
Volume 13 No.2 August 2019

The Social, Economic and Fiscal Effects of Tax Amnesty

the Evidence from Kosovo
Dr. Enis Abdurrahmani1, Prof. Dr. Zeki Doğan2
Trepça-Joint Stock Company, PIM, Mitrovicë1
Niğde Ömer Halisdemir University, Faculty of Economics and Administrative Sciences, Business
Department, Niğde2
[email protected]
[email protected]

Abstract- Tax amnesty as a common practice has a very important place in the fiscal literature. Empirical evidence
suggests that tax amnesties in the short term can increase collection of tax revenues with very low cost. But on the other side
tax amnesties can give quite negative effects over the long term through discouraging regular taxpayers’ from their unequal
treatment. In this study we have addressed the effects of tax amnesty in the Republic of Kosovo. Based on the survey research
with taxpayers’ and through analyses we have defined the attitudes and behaviours of each type of taxpayers’ regarding the
social, economic and fiscal effects of tax amnesty in the country. Based on the participation level of the taxpayers’ judgments
regarding the effects of tax amnesties, the results have revealed five main judgments according to their level of importance.
Keywords- Tax Amnesty; Taxpayers’; Taxpayers’ Compliance; Tax Revenue

1. INTRODUCTION to the government, which it also justified the application of

tax amnesty in the country.
Tax amnesty as a widespread practice in the last 30 years While there are many reasons for the implementation of
has occupied an important place in the national fiscal tax amnesty, the tax amnesty in the Republic of Kosovo
programs in almost every country of the world. has been a government program, which has amnestied all
Governments in most countries of the world have practiced the past penalties of tax evaders in case of voluntary
tax amnesties as part of their government programs, payment of unpaid taxes.
ranging from countries like the United States, the Pacific This study determines the social, economic and fiscal
countries (Australia, Philippines), countries from Latin effects of tax amnesty to taxpayers’ in Republic of
America (Mexico, Argentina, Panama, Bolivia, etc.) Kosovo. This study based on survey research with
countries from Europe (France, Italy, Greece, Austria, taxpayers’ and analyzes conducted in SPSS, have
Finland, Belgium, Portugal, Turkey, Kosovo, Albania, examined the attitudes and behaviors of each type of
etc.), up to the Asian countries (Russia, Australia, the taxpayers’ regarding the social, economic and fiscal effects
Philippines, India, etc.). Therefore, today it is acceptable to of tax amnesty. This research is very important as it is
say that tax amnesty is a common and popular practice. focused in Kosovo, where the level of competition is low
Based on the experiences of many countries tax amnesties in all sectors and as well the entry into the sectors is
can be treated successfully only if they bring long-term difficult and risky.
effects. According to many opinions of fiscal policy
makers, these practices could undermine fiscal system 2. LITERATURE REVIEW
seriously, especially in those countries that have problems
Over the last three decades, many countries around the
with tax evasion and low level of voluntary participation of
world have practiced tax amnesties in their fiscal policies,
taxpayers. However, governments in many countries have
mainly for certain political, economic and social reasons
preferred short-term positive effects that bring tax
and because they are open to international trade. Usually
amnesties ignoring their real long-term effects.
tax amnesties are practiced due to the need for additional
Even Kosovo's case seems to be the same, it is not
state liquidity. The views given by many researchers prove
surprising that the Government of the Republic of Kosovo
that tax amnesties have multidimensional benefits.
has indicated a preference to short-term effects of tax
Tax amnesties can "provide valuable information to
amnesty, based on the fact that long-term policies do not
improve implementation by adding new taxpayers to the
provide the electorate vote for the government. The first
records" (Villalba, 2017, p. 286)[14][14].
results from tax amnesty practices in Kosovo are rather
According to Alm et al. (2009, p. 249)[1] the main benefit
encouraging, they have provided encouraging indicators in
of tax amnesties is to increase tax revenues in the short
the budget revenues, by providing additional public funds
term. Policy makers often see tax amnesties as an effective

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Volume 13 No.2 August 2019

policy tool for benefiting from additional sources of program is followed by a powerful enforceable law, where
income and improving taxpayers’ compliance (Bayer et al. then in the long-term tax amnesty will be effective in
2014, p. 31, 32)[3]. boosting investments and could provide rise of state
A study done by Andrenoni (1991, p. 157)[2] shows that revenues by rising the tax base.
although fraud will increase as a result of tax amnesty, it Also, an important study by Gunawan and Sukartha (2016,
does not mean that tax revenues will also fall. Amnesty p. 2036)[8] has aimed to determine the factors that have
can increase fraud, but it can also have other beneficial affected tax revenues during 2015 at the tax office of
effects that will improve efficiency. northern Badung. The assumptive factors influencing tax
The alternative study done by Ibrahim et al. (2017, p. revenues are considered tax amnesty, economic growth
224)[9] has reviewed the implementation of tax amnesty in and institutional transformation of the tax department. The
9 Asian states. The study shows that in order to have an final results showed that tax amnesty, economic growth
efficient tax amnesty effect, the government should avoid and institutional transformation of the tax department have
their long-term duration and their frequent application as it had a positive impact on tax revenues during 2015 in
would have a detrimental effect on taxpayer behavior. northern Badung.
The study done by Buckwalter et al. (2014, p. 796)[5],
explore the link between tax amnesty and financial 3. PURPOSE OF STUDY
reporting irregularities. The survey results reveal that firms In this paper we have dealt with the attitudes of taxpayers
based in countries that apply a tax amnesty program are regarding social, economic and financial effects of tax
more likely to begin to engage in financial reporting amnesty in the country. The aim of the study based on the
irregularities during the amnesty period. But according to demographic characteristics of taxpayers’ participating in
this study, financial reporting irregularities have occurred the survey is to determine the differences between
to be found only during repeated tax amnesties rather than taxpayer’s’ participation level about social, economic and
initial ones. Also, the findings shows that tax amnesties in financial effects of tax amnesty.
the past have caused adverse effects on the behavior of In addition to the main purpose of the study, other
managers. information required to be obtained through this research
The study conducted by Pravasanti (2018, p. 84)[12] are as follows;
intended to recognize the impact of politics and the success - Determining the demographic characteristics of
of the tax amnesty in the Indonesian economy. The result respondents,
of this research showed that the tax amnesty in Indonesia - Determining the social, economic and financial effects
was successful and had a significantly impact on the of tax amnesty in the State of the Republic of Kosovo,
country's economy. - To make suggestions for solutions and improvement
The alternative study done by Gergerlioğlu (2017, p. of the fiscal system based on the research findings.
46)[7] shows that both the beneficiaries of tax amnesty and
the non-beneficiaries of tax amnesty gives similar opinion 3.1. Scope and Limits of Research
regarding statements about tax amnesties. Based on the This research was conducted in the Republic of Kosovo,
results of this research, the majority of beneficiaries of tax part of this research have been taxpayers of personal
amnesty and non-beneficiaries argue that revenues from income tax, taxpayers’ of corporate income tax and
tax amnesties contribute significantly to state treasury. taxpayers’ who apply the presumptive tax. This research is
The study conducted by Nuryati and Pratama (2018, p. mainly carried out by taxpayers operating in the regions of
237)[11] in Bekasi, Indonesia, was intended to investigate Pristina, Mitrovica, Prizren, Peja and Ferizaj, and mainly
the impact of tax amnesty on taxpayers’ compliance. The due to technical, time and financial reasons the expansion
results indicated that tax amnesty has made a positive of research in other Albanian territories has not been
contribution to improving taxpayers’ compliance in reached.
Bekasi. This study provides empirical facts that good 3.2. Research Model and Hypothesis
implementation of tax amnesty program can improve The research model was previously organized and planned
taxpayers’ compliance. in all details so that the exact research results can be used
Another alternative study done by Bose and Jetter (2018, to test the following hypotheses;
p. 15)[4] has reviewed tax amnesty from the view of H1. There is a significant difference between participating
changing economic conditions. With the assumptions, taxpayers’ by their gender, in their judgments about social,
what if, during the tax amnesty period, liberalization and / economic and financial effects of tax amnesties.
or technological progress occurred? Based on the H2. There is a significant difference between participating
assumption that taxpayers’ can use this opportunity by taxpayers’ by their age, in their judgments about social,
acting only in the legal sector. economic and financial effects of tax amnesties.
An important study done by Said (2018, p. 54)[13] H3. There is a significant difference between participating
concludes that the implementation of the tax amnesty taxpayers’ by their level of education, in their judgments
program can function optimally in accordance with the about social, economic and financial effects of tax
provisions of its implementation, as well as with the amnesties.
participation of all government-related parties if this
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 International Journal of Management Excellence
Volume 13 No.2 August 2019

H4. There is a significant difference between participating Frequency analyses were made for each question in the
taxpayers’ by their duration as taxpayers’, in their questionnaire. Through cross-tables were investigated the
judgments about social, economic and financial effects of differences between the type of taxpayers’. However, in
tax amnesties. order to test the hypothesis, T-test (Independent-Samples
T-Test), T-test (One-Way Anova), and Tukey (Post Hock
3.3. Sampling Method
Turkey-Test) test were used. The Liker 5th scale is used as
This research is oriented to taxpayers’ of personal income
the data measurement scale, where the distribution of the
tax, corporate income tax, and to taxpayers’ who apply the
data measurement scale is as follows:
presumptive tax, mainly in the region of Pristina,
- From 0 to 1,24 the most insignificant (Strongly
Mitrovica, Prizren, Peja and Ferizaj. The model used in
Disagree / Too Irrelevant),
this research to select the number of research samples is
- From 1.25 to 2.24 insignificant (Disagree /
the model originally used by Moser and Kalton (1979)[10],
Irrelevant),
and later by Doğan and Besen (2008)[6], which is based on
- From 2.25 to 3.24 neither significant nor
the following formula:
insignificant (neither agree nor disagree / neither
In this formula;
relevant nor irrelevant)
n = Necessary number of samples calculated - From 3.25 to 4.24 significant (Agree / Relevant),
before limited core correction - Above 4.25 will be interpreted as most significant
X = The variability in the population (Strongly Agree / Too Relevant).
[S.E(p)] = Standard error
3.6. Demographic Characteristics
Source: (Moser and Kalton, 1979: 147; Doğan and Besen, 2008:
Taxpayers' characteristics about gender, age, education
118)
In this model, standard error is tolerated up to 0.04 and status, taxpayers' type and their duration as taxpayers' are
confidence interval is tolerated up to 95%. It was assumed presented separately as below.
that the change in the population would be 50% and the
number of samples required in this study should be at least
2010. Personal income taxpayers’, corporate taxpayers’
and presumptive taxpayers’ from the regions of Pristina,
Mitrovica, Prizren, Peja and Ferizaj were considered
separately. Personal income taxpayers’ comprise 564
samples or 28 %. The corporate income taxpayers’
comprise 322 samples or 16% and taxpayers’ which apply
presumptive tax comprise 1128 samples or 56%.
3.4. Data Collection
In order to collect data for research we have used the
survey method. The data was collected from taxpayers in
written form. Data collection, was completed in a 12-
month.
Questionnaire used in the study consists of three pages.
The survey was prepared based on the survey used by
Doğan and Besen (2008). The first part of the survey was
aimed to determine the demographic characteristics of the
taxpayers’, such as gender, age and educational status. The
second part of the survey was aimed to determine data on
the type of taxpayers’ and their duration as taxpayers’ in
the country. The third part of the survey was aimed to
determine the social, economic and financial effects of tax
amnesty.
3.5. Methods Used in the Data Analysis
Processing and evaluation of data is done through SPSS
10.0 (Statistical Package for Social Sciences). Results
obtained from SPSS analysis were transferred to Microsoft
Excel tables and Word programs.

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 International Journal of Management Excellence
Volume 13 No.2 August 2019

Table. 1 Taxpayers’ Distribution by Demographic Characteristics

Percentage Total
Male 86%
Gender 100%
Female 14%
18-25 23%
26-45 61%
Age 100%
46-60 11%
Over 61 5%
Primary School 2%
High School 34%
Education Student 3% 100%
University Graduate 53%
Master Graduate 8%
Personal Income Tax 28%
Taxpayers’ Type Corporate Income Tax 16% 100%
Presumptive Tax 56%
Less than (1) year 8%
1-5 years 32%
Taxpayers’ by Duration 100%
6-16 years 53%
More than 17 years 7%

As seen, 86% of respondents in the survey are male and

14% of respondents are female. The age structure of 4. TAXPAYERS' PARTICIPATION
respondents involved in the survey consists of 23% of ANALYSIS RELATED THEIR
respondents aged 18-25 years, 61% of respondents aged JUDGMENTS ABOUT TAX AMNESTY
26-45 years, 11% of respondents aged 46-60 years and EFFECTS
5% of respondents over 61 years. These results show that
the majority of respondents in the survey are middle-aged In this part of study, as can be seen in Table 2, taxpayers’
taxpayers' ranging in age from 26 to 45 years. participation level related their judgments about tax
Based on the results, 2% of respondents have primary amnesty effects are presented in detail. On the other hand,
education, 34% of respondents have secondary school, in Table 3, is presented the taxpayers’ participation level
3% of respondents are students, 53% of respondents have in cross-tables regarding taxpayers’ type, about social,
a university degree and 8% of respondents have a master's economic and fiscal effects of tax amnesty. However,
degree. There were not respondents with doctoral level. based on the demographic characteristics of taxpayers'
The respondent’s structure according to their type consists participated in the survey, such as gender, age, education,
of three types of taxpayers'; Personal income taxpayers’ type of taxpayers’ and their duration as taxpayers’, in
comprise 28% of respondents, corporate income order to find the significant differences between the
taxpayers’ comprise 16% of respondents, and taxpayers’ participation level and in order to test the
presumptive income taxpayers’ comprise 56% of hypotheses, the results of the applied tests such as T-test
respondents. The structure of respondents according to (Independent-Samples T-Test), One Way Anova-Test and
their duration consists of four categories; Taxpayers’ with Tukey-Test are also provided.
a duration of less than 1 year comprise 8% of
respondents, taxpayers’ with a duration of 1-5 years
comprise 32% of respondents, taxpayers’ with a duration
of 6-16 years comprise 53 % of respondents as well as
taxpayers’ over 17 years comprise 7% of respondents.

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 International Journal of Management Excellence
Volume 13 No.2 August 2019

Table 2. Distribution of Taxpayers' Participation Level Related their Judgments about Tax Amnesty Effects
Standard
EFFECTS OF TAX AMNESTIES Participation Degrees Mean
Deviation
Stat.
Social Effects of Tax Amnesty 5 4 3 2 1 Stat. Stat.
Error
Tax amnesty reduced workload of tax office and
682 926 203 134 69 4.00 .022 1.007
judiciary
Tax amnesty increased taxpayers' willingness to
659 528 287 360 180 3.56 .030 1.340
pay taxes
Tax amnesty has increased taxpayers' tax
488 507 388 359 272 3.29 .030 1.363
compliant
Tax amnesty has affected tax evaders to correct
604 716 393 173 128 3.74 .026 1.160
their future tax statements and pay taxes on time
Tax amnesty has penalized honest taxpayers while
451 602 317 393 251 3.30 .030 1.341
tax evaders have rewarded
Repeated tax amnesties reduced the taxpayer
735 831 101 236 111 3.92 .026 1.172
compliance of honest taxpayers’
Economic Effects of Tax Amnesty
Tax amnesties brought some businesses into
economic life and provided revenue flow to the 742 919 216 105 32 4.11 .020 .903
state
Tax amnesties reduced tax compliance, leading to
678 750 202 267 117 3.80 .027 1.204
an increase in the informal economy
Tax amnesties led to unfair competition between
132 100 381 774 627 2.17 .025 1.122
tax evaders and honest taxpayers’
Frequent tax amnesties have caused the state to
lose income by encouraging taxpayers’ to evade 49 116 50 978 821 1.81 .020 .919
taxes
Financial Effects of Tax Amnesty
Tax amnesties provide a rapid income flow in
753 946 152 96 67 4.10 .021 .964
closing budget deficits
Tax amnesties raise tax collection by expanding
662 617 337 280 118 3.71 .027 1.223
the tax base
Tax amnesties have affected the collection of
548 696 298 363 109 3.60 .027 1.212
public receivables that have not been collected
Tax amnesties have reduced the taxpayers'
willingness to pay taxes and have undermined 249 231 347 706 481 2.53 .029 1.303
government revenues
(5 = Strongly Agree, 4 = Agree, 3 = Neither Agree nor Disagree, 2 = Disagree, 1 = Strongly Disagree)

In Table 2, taxpayers' distribution regarding their The taxpayers’ judgment that “Tax amnesty reduced
judgments about social, economic and fiscal effects of tax workload of tax office and judiciary” (with an average of
amnesty are shown in detail. The taxpayers’ distribution 4.00) “Agree” have been answered,
regarding their judgments about social, economic and The taxpayers’ judgment that “Repeated tax amnesties
fiscal effects of tax amnesty, according to the average of reduced the taxpayer compliance of honest taxpayers”
their answers, can be summarized as follows. (with an average of 3.92) “Agree” have been answered,
Taxpayers, judgments about the effects of tax amnesty; The taxpayers’ judgment that “Tax amnesties reduced tax
The taxpayers’ judgment that “Tax amnesties brought compliance, leading to an increase in the informal
some businesses into economic life and provided revenue economy” (with an average of 3.80) “Agree” have been
flow to the state” (with an average of 4.11) “Agree” have answered,
been answered, The taxpayers’ judgment that “Tax amnesty has affected
The taxpayers’ judgment that “Tax amnesties provide a tax evaders to correct their future tax statements and pay
rapid income flow in closing budget deficits” (with an taxes on time” (with an average of 3.74) “Agree” have
average of 4.10) “Agree” have been answered, been answered,
The taxpayers’ judgment that “Tax amnesties raise tax
collection by expanding the tax base” (with an average of
3.71) “Agree” have been answered,
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TechMind Research Society 1914 | P a g e
 International Journal of Management Excellence
Volume 13 No.2 August 2019

The taxpayers’ judgment that “Tax amnesties have The taxpayers’ judgment that “Tax amnesties led to unfair
affected the collection of public receivables that have not competition between tax evaders and honest taxpayers”
been collected” (with an average of 3.60) “Agree” have (with an average of 2.17) “Disagree” have been answered,
been answered, The taxpayers’ judgment that “Frequent tax amnesties
The taxpayers’ judgment that “Tax amnesty increased have caused the state to lose income by encouraging
taxpayers' willingness to pay taxes” (with an average of taxpayers’ to evade taxes” (with an average of 1.18)
3.56) “Agree” have been answered, “Disagree” have been answered,
The taxpayers’ judgment that “Tax amnesty has penalized These results indicate that the judgments of taxpayers
honest taxpayers while tax evaders have rewarded” (with who participated in the survey, regarding tax amnesty
an average of 3.30) “Agree” have been answered, effects, the judgment that tax amnesties brought some
The taxpayers’ judgment that “Tax amnesty has increased businesses into economic life and provided revenue
taxpayers' tax compliant” (with an average of 3.29) streams to the state, resulted in a higher response of
“Agree” have been answered, taxpayers (averagely 4:11). Therefore, taxpayers who
The taxpayers’ judgment that “Tax amnesties have participated in the study stressed that tax amnesties
reduced the taxpayers' willingness to pay taxes and have managed to ensure the flow of revenues to the state by
undermined government revenues” (with an average of bringing several businesses in economic life in this way
2.53) “Neither Agree nor Disagree” have been answered, taxpayers wanted to draw attention to this judgment with
a high percentage of participation.
4.1. Taxpayers' Participation Analysis by
Taxpayers' Type Related their Judgments
about Tax Amnesty Effects
In this part of the study, as shown in Table 3, is presented
taxpayers' participation level by taxpayers’ types related
their judgments about tax amnesty effects.

Table 3. Distribution of Taxpayers' Participation by their Type regarding their Judgments about Tax Amnesty Effects
EFFECTS OF TAX AMNESTIES Type of Taxpayers' Participation Degrees Mean
Total
Social Effects of Tax Amnesty 5 4 3 2 1 Mean
Mean
Personal Income 179 261 58 46 20
3.95
Tax (31.7) (46.3) (10.3) (8.2) (3.5)
Tax amnesty reduced workload of 390 508 116 70 44
Presumptive Tax 4.00 4.00
tax office and judiciary (34.6) (45.0) (10.3) (6.2) (3.9)
113 157 29 18 5
Corporate Tax 4.10
(35.1) (48.8) (9.0) (5.6) (1.6)
Personal Income 181 141 83 102 57
3.51
Tax (32.1) (25.0) (14.7) (18.1) (10.1)
Tax amnesty increased taxpayers' 380 289 152 212 95
Presumptive Tax 3.56 3.57
willingness to pay taxes (33.7) (25.6) (13.5) (18.8) (8.4)
98 98 52 46 28
Corporate Tax 3.60
(30.4) (30.4) (16.1) (14.3) (8.7)
Personal Income 129 142 113 102 78
3.25
Tax (22.9) (25.2) (20.0) (18.1) (13.8)
Tax amnesty has increased taxpayers' 285 277 217 201 148
Presumptive Tax 3.29 3.31
tax compliant (25.3) (24.6) (19.2) (17.8) (13.1)
74 88 58 56 46
Corporate Tax 3.27
(23.0) (27.3) (18.0) (17.4) (14.3)
Personal Income 197 192 95 47 33
3.84
Tax (34.9) (34.0) (16.8) (8.3) (5.9)
Tax amnesty has affected tax evaders
324 397 234 99 74
to correct their future tax statements Presumptive Tax 3.74 3.71
(28.7) (35.2) (20.7) (8.8) (6.6)
and pay taxes on time
83 127 64 27 21
Corporate Tax 3.70
(25.8) (39.4) (19.9) (8.4) (6.5)
Personal Income 121 168 90 107 78
3.26
Tax (21.5) (29.8) (16.0) (19.0) (13.8)
Tax amnesty has penalized honest
257 335 173 229 134
taxpayers while tax evaders have Presumptive Tax 3.30 3.31
(22.8) (29.7) (15.3) (20.3) (11.9)
rewarded
73 99 54 57 39
Corporate Tax 3.34
(22.7) (30.7) (16.8) (17.7) (12.1)
Repeated tax amnesties reduced the Personal Income 212 218 32 71 31 3.92 3.90
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 International Journal of Management Excellence
Volume 13 No.2 August 2019

taxpayer compliance of honest Tax (37.6) (38.7) (5.7) (12.6) (5.5)

taxpayers’ 412 467 56 124 69
Presumptive Tax 3.91
(36.5) (41.4) (5.0) (11.0) (6.1)
111 146 13 41 11
Corporate Tax 3.95
(34.5) (45.3) (4.0) (12.7) (3.4)
Economic Effects of Tax Amnesty
Personal Income 217 249 69 24 5
4.15
Tax (38.5) (44.1) (12.2) (4.3) (0.9)
Tax amnesties brought some
414 508 118 67 21
businesses into economic life and Presumptive Tax 4.11 4.09
(36.7) (45.0) (10.5) (5.9) (1.9)
provided revenue flow to the state
111 162 29 14 6
Corporate Tax 4.11
(34.5) (50.3) (9.0) (4.3) (1.9)
Personal Income 188 219 55 66 36
3.81
Tax (33.3) (38.8) (9.8) (11.7) (6.4)
Tax amnesties reduced tax
389 405 114 156 64
compliance, leading to an increase in Presumptive Tax 3.80 3.80
(34.5) (35.9) (10.1) (13.8) (5.7)
the informal economy
101 126 33 45 17
Corporate Tax 3.77
(31.4) (39.1) (10.2) (14.0) (5.3)
Personal Income 25 26 109 213 191
2.08
Tax (4.4) (4.6) (19.3) (37.8) (33.9)
Tax amnesties led to unfair
65 64 218 450 331
competition between tax evaders and Presumptive Tax 2.17 2.19
(5.8) (5.7) (19.3) (39.9) (29.3)
honest taxpayers’
42 10 54 111 105
Corporate Tax 2.30
(13.0) (3.1) (16.8) (34.5) (32.6)
Personal Income 10 42 10 276 226
1.82
Frequent tax amnesties have caused Tax (1.8) (7.4) (1.8) (48.9) (40.1)
the state to lose income by 16 59 32 548 473
Presumptive Tax 1.81 1.76
encouraging taxpayers’ to evade (1.4) (5.2) (2.8) (48.6) (41.9)
taxes 23 15 8 154 122
Corporate Tax 1.95
(7.1) (4.7) (2.5) (47.8) (37.9)
Financial Effects of Tax Amnesty
Personal Income 219 244 50 29 22
4.08
Tax (38.8) (43.3) (8.9) (5.1) (3.9)
Tax amnesties provide a rapid
422 540 81 51 34
income flow in closing budget Presumptive Tax 4.10 4.12
(37.4) (47.9) (7.2) (4.5) (3.0)
deficits
112 162 21 16 11
Corporate Tax 4.08
(34.8) (50.3) (6.5) (5.0) (3.4)
Personal Income 180 177 88 92 27
3.69
Tax (31.9) (31.4) (15.6) (16.3) (4.8)
Tax amnesties raise tax collection by 376 346 195 143 68
Presumptive Tax 3.71 3.73
expanding the tax base (33.3) (30.7) (17.3) (12.7) (6.0)
106 94 54 45 23
Corporate Tax 3.67
(32.9) (29.2) (16.8) (14.0) (7.1)
Personal Income 153 209 83 88 31
3.65
Tax (27.1) (37.1) (14.7) (15.6) (5.5)
Tax amnesties have affected the
312 368 165 225 58
collection of public receivables that Presumptive Tax 3.60 3.58
(27.7) (32.6) (14.6) (19.9) (5.1)
have not been collected
83 119 50 50 20
Corporate Tax 3.61
(25.8) (37.0) (15.5) (15.5) (6.2)
Personal Income 64 62 105 180 153
2.48
Tax amnesties have reduced the Tax (11.3) (11.0) (18.6) (31.9) (27.1)
taxpayers' willingness to pay taxes 146 132 183 409 258
Presumptive Tax 2.53 2.56
and have undermined government (12.9) (11.7) (16.2) (36.3) (22.9)
revenues 39 37 59 117 70
Corporate Tax 2.56
(12.1) (11.5) (18.3) (36.3) (21.7)

Based on the results presented in Table 3, the results of corporate taxpayers’ (with an average of 4.00) and the
taxpayers’ participated in the survey related their presumptive taxpayers’ (with an average of 4.10) all of
judgments about tax amnesty social effects, “tax amnesty them “Agree” have been answered. According to the
reduced workload of tax office and judiciary” the personal results, the majority of the taxpayers’ participated in the
income taxpayers’ (with an average of 3.95), the

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 International Journal of Management Excellence
Volume 13 No.2 August 2019

survey agreed that tax amnesty reduced workload of tax From judgments about tax amnesty economic effects “tax
office and judiciary. amnesties reduced tax compliance, leading to an increase
From judgments about tax amnesty social effects “tax in the informal economy” the personal income taxpayers’
amnesty increased taxpayers' willingness to pay taxes” the (with an average of 3.81), the corporate taxpayers’ (with
personal income taxpayers’ (with an average of 3.51), the an average of 3.80) and the presumptive taxpayers’ (with
corporate taxpayers’ (with an average of 3.57) and the an average of 3.77) all of them “Agree” have been
presumptive taxpayers’ (with an average of 3.60) all of answered. When these results are analyzed, it is seen that
them “Agree” have been answered. When these results the majority of taxpayers’ who participated in the survey
are examined, the majority of the taxpayers’ participated agreed that tax amnesties have led to an increase in the
in the survey agreed that tax amnesty effects the informal economy by reducing tax compliance.
taxpayers’ willingness to pay taxes. From judgments about tax amnesty economic effects “tax
From judgments about tax amnesty social effects “tax amnesties led to unfair competition between tax evaders
amnesty has increased taxpayers' tax compliant” the and honest taxpayers” the personal income taxpayers’
personal income taxpayers’ (with an average of 3.25), the (with an average of 2.08), and corporate taxpayers (with
corporate taxpayers’ (with an average of 3.31) and the an average of 2.19) “Disagree” while presumptive
presumptive taxpayers’ (with an average of 3.27) all of taxpayers’ (with an average of 2.30) “Neither Agree Nor
them “Agree” have been answered. When these results Disagree”, have been answered. When these results are
are analyzed, it is seen that the majority of the taxpayers’ analyzed, it is seen that the majority of the personal
participated in the survey, agreed that tax amnesty income taxpayers’ and corporate taxpayers’ do not
positively affects the tax compliant. believe that tax amnesties led to unfair competition
From judgments about tax amnesty social effects “tax between taxpayers’, while the majority of the presumptive
amnesty has affected tax evaders to correct their future taxpayers’ remained undecided.
tax statements and pay taxes on time” the personal From judgments about tax amnesty economic effects
income taxpayers’ (with an average of 3.84), the “frequent tax amnesties have caused the state to lose
corporate taxpayers’ (with an average of 3.71) and the income by encouraging taxpayers’ to evade taxes” the
presumptive taxpayers’ (with an average of 3.70) all of personal income taxpayers’ (with an average of 1.82), the
them “Agree” have been answered. These results shows corporate taxpayers’ (with an average of 1.76) and the
that taxpayers' believe that tax amnesty will have such an presumptive taxpayers’ (with an average of 1.95) all of
effect. them “Disagree” have been answered. The above results
From judgments about tax amnesty social effects “tax shows that the majority of the taxpayers who participated
amnesty has penalized honest taxpayers while tax evaders in the survey do not agree with the judgment that frequent
have rewarded” the personal income taxpayers’ (with an tax amnesty have caused the loss of incomes for the state.
average of 3.26), the corporate taxpayers’ (with an From judgments about tax amnesty financial effects “tax
average of 3.31) and the presumptive taxpayers’ (with an amnesties provide a rapid income flow in closing budget
average of 3.34) all of them “Agree” have been answered. deficits” the personal income taxpayers’ (with an average
The above results shows that the majority of taxpayers’ of 4.08), the corporate taxpayers’ (with an average of
agreed regarding the effects of tax amnesties that tax 4.12) and the presumptive taxpayers’ (with an average of
amnesties have punished the honest taxpayers. 4.02) all of them “Agree” have been answered. When
From judgments about tax amnesty social effects these results are analyzed, it is seen that the majority of
“repeated tax amnesties reduced the taxpayer compliance the taxpayers who participated in the survey concluded
of honest taxpayers” the personal income taxpayers’ (with that tax amnesties provide a rapid income flow.
an average of 3.90), the corporate taxpayers’ (with an From judgments about tax amnesty financial effects “tax
average of 3.91) and the presumptive taxpayers’ (with an amnesties raise tax collection by expanding the tax base”
average of 3.95) all of them “Agree” have been answered. the personal income taxpayers’ (with an average of 3.69),
The above results show that most of the taxpayers the corporate taxpayers’ (with an average of 3.73) and the
participating in the survey agreed that the constantly presumptive taxpayers’ (with an average of 3.67) all of
repeated tax amnesties have reduced the tax compliance. them “Agree” have been answered. The above results
From judgments about tax amnesty economic effects “tax show that the majority of the taxpayers who participated
amnesties brought some businesses into economic life and in the survey concluded that tax amnesties raise tax
provided revenue flow to the state” the personal income revenue collection.
taxpayers’ (with an average of 4.15), the corporate From judgments about tax amnesty financial effects “tax
taxpayers’ (with an average of 4.09) and the presumptive amnesties have affected the collection of public
taxpayers’ (with an average of 4.11) all of them “Agree” receivables that have not been collected” the personal
have been answered. These data shows that majority of income taxpayers’ (with an average of 3.65), the
taxpayers’ who participated in the survey agreed that tax corporate taxpayers’ (with an average of 3.58) and the
amnesties provided income flows to the state by bringing presumptive taxpayers’ (with an average of 3.61) all of
some taxpayers into economic life. them “Agree” have been answered. These results shows

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 International Journal of Management Excellence
Volume 13 No.2 August 2019

that taxpayers’ believe that tax amnesty will have such an The personal income taxpayers’ (with an average of 2.48),
effect. the corporate taxpayers’ (with an average of 2.56) and the
From judgments about tax amnesty financial effects “tax presumptive taxpayers’ (with an average of 2.56) all of
amnesties have reduced the taxpayers' willingness to pay them “Neither Agree nor Disagree” have been answered.
taxes and have undermined government revenues” When these results are analyzed, it is seen that the
majority of the taxpayers’ who participated in the survey
remained undecided in the judgment that tax amnesties
reduced the taxpayers' willingness to pay taxes and
resulted to the loss of government revenues.
4.2. Test of Hypothesis H1
In this section, in order to test the first hypothesis to
verify the taxpayers’ differences by their gender related
their judgments about social, economic and financial
effects of tax amnesty, t-test (Independent-Samples T-
test) has been applied, where the results of the analysis
are as follows:
H1. There is a significant difference between participating
taxpayers’ by their gender, in their judgments about
social, economic and financial effects of tax amnesties.
H0. There is no significant difference between
participating taxpayers’ by their gender, in their
judgments about social, economic and financial effects of
tax amnesties.

Table 4. Distribution of Taxpayers' Participation Level by their Gender Related Their Judgments About Tax Amnesty Effects
Levene's Test for Equality of Variances t-test for Equality of Means
Sig. Mean Std.
F P t
Gender N Percentage Mean Std. Dev. 2 (t) Diffe. Deviat.
Male 1732 86% 47.6467 4.35364 .168 .866 .04736 .28151
1.414 .234
Female 282 14% 47.5993 4.56574 .163 .871 .04736 .29132
When these results are analyzed, it is seen that in Table 4, has been applied, where the results of the analysis are as
the average scores received from the difference of follows:
taxpayers’ participation by their gender related their H2. There is a significant difference between participating
judgments about tax amnesty effects are; 47.64 points for taxpayers’ by their age, in their judgments about social,
male taxpayers and 47.59 points for female taxpayers. economic and financial effects of tax amnesties.
Since the value of P = .234 and p> 0.05, H1 hypothesis H0. There is no significant difference between
was rejected since there was not statistically significant participating taxpayers’ by their age, in their judgments
differences in the level of taxpayers’ participation by their about social, economic and financial effects of tax
gender. amnesties.
4.3. Test of Hypothesis H2
In this section, in order to test the second hypothesis to
verify the taxpayers’ participation level differences by
their age related their judgments about social, economic
and financial effects of tax amnesty, One-Way ANOVA
Table 5. Distribution of Taxpayers' Participation Level by their Age Related their Judgments about Tax Amnesty Effects
95% Confidence Interval
Age N Mean Std. Deviation Std. Error F P
L. Bound U. Bound
18-25 463 47.7970 4.46945 .20771 47.3888 48.2052
26-45 1229 47.4727 4.32423 .12335 47.2307 47.7147
46-60 221 47.7466 4.17014 .28051 47.1938 48.2994 2.901 .034
Over 61 101 48.7228 4.98421 .49595 47.7388 49.7067
Total 2014 47.6400 4.38282 .09766 47.4485 47.8315
participation level by their age related their judgments
When these results are analyzed, it is seen that in Table 5, about social, economic and financial effects of tax
the average scores received by the One-Way ANOVA amnesty are; 47.79 points for those between the ages of
analysis to determine the difference of taxpayers’ 18-25, 47.47 points for those between 26-45, 47.74 points
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 International Journal of Management Excellence
Volume 13 No.2 August 2019

for those between 46-60, and 48.72 points for over 61. As
a result of the One-Way ANOVA analysis, it was found
that taxpayers’ aged between 26-45 years has the lowest
average and taxpayers’ over 61 have the highest average.
The value of F = 2.901 and P = .034 were P<0.05, the H2
hypothesis was accepted because there was statistically
significant differences in the taxpayers’ participation level
in their age-based responses. In order to determine the
further differences between groups the Tukey test was
applied.
Table 6. Distribution of Taxpayers' Participation Level by their Age Related their Judgments about Tax Amnesty Effects by
Tukey Test
95% Confidence Interval
Mean Differ. Standard
(I) Age (J) Age Sig.P Lower Bound Upper
(I-J) Error
Bound
26-45 .3242 .23866 .526 -.2894 .9379
18-25 46-60 .0504 .35783 .999 -.8697 .9704
Over 61 -.9258 .48065 .217 -2.1616 .3100
18-25 -.3242 .23866 .526 -.9379 .2894
26-45 46-60 -.2739 .31978 .827 -1.0961 .5483
Over 61 -1.2500* .45303 .030 -2.4149 -.0852
18-25 -.0504 .35783 .999 -.9704 .8697
46-60 26-45 .2739 .31978 .827 -.5483 1.0961
Over 61 -.9762 .52567 .247 -2.3278 .3754
18-25 .9258 .48065 .217 -.3100 2.1616
Over 61 26-45 1.2500* .45303 .030 .0852 2.4149
46-60 .9762 .52567 .247 -.3754 2.3278
Tukey's test is applied to determine the group that caused ANOVA has been applied, where the results of the
the differences, as shown in Table 6, it was found analysis are as follows:
important differences between taxpayers’ aged 26-45 H3. There is a significant difference between participating
years, and over 61 years, with the level P value p = 0.30. taxpayers’ by their level of education, in their judgments
It can be concluded that the taxpayers’ judgments about about social, economic and financial effects of tax
tax amnesty affects are more positive to the elderly amnesties.
taxpayers’. H0. There is no significant difference between
participating taxpayers’ by their level of education, in
4.4. Test of Hypothesis H3
their judgments about social, economic and financial
In this section, in order to test the third hypothesis to
effects of tax amnesties.
verify the taxpayers’ participation level differences by
their education level related their judgments about social,
economic and financial effects of tax amnesty, One-Way
Table 7. Distribution of Taxpayers' Participation Level by their Education Related their Judgments about Tax Amnesty
Effects
95% Confidence Interval
Education Std. Std.
N Mean Lower Upper F P
Deviation Error
Bound Bound
Primary School 40 47.7500 4.69997 .74313 46.2469 49.2531
High School 685 47.5474 4.36019 .16659 47.2203 47.8745
Student 61 48.3443 4.30072 .55065 47.2428 49.4457
1.005 .404
University Graduate 1067 47.7235 4.40678 .13491 47.4588 47.9882
Master Graduate 161 47.1863 4.26791 .33636 46.5221 47.8506
Total 2014 47.6400 4.38282 .09766 47.4485 47.8315
When these results are analyzed, it is seen that in Table 7, points for students, 47.72 points for university graduated
the average scores received by the One-Way ANOVA and 47.18 points for master graduated.
analysis to determine the taxpayers’ participation level Since the value of F = 1.005 and P = .404 were P >0.05,
differences by their education related their judgments the H3 hypothesis was rejected because there was not
about tax amnesty effects are; 47.75 points for taxpayers’ statistically significant differences in the between
with primary school, 47.54 points for high school, 48.34 taxpayers’ by their education.
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 International Journal of Management Excellence
Volume 13 No.2 August 2019

4.5. Test of Hypothesis H4

In this section, in order to test the fourth hypothesis to
verify the taxpayers’ participation level differences by
duration as taxpayers’ related their judgments about
social, economic and financial effects of tax amnesty,
One-Way ANOVA has been applied, where the results of
the analysis are as follows:
H4. There is a significant difference between participating
taxpayers’ by their duration as taxpayers’, in their
judgments about social, economic and financial effects of
tax amnesties.
H0. There is no significant difference between
participating taxpayers’ by their duration as taxpayers’, in
their judgments about social, economic and financial
effects of tax amnesties.
Table 8. Distribution of Taxpayers' Participation Level by Duration as Taxpayers’ Related their Judgments about Tax
Amnesty Effect
95% Confidence Interval
Std. Std.
Duration as Taxpayer N Mean F P
Deviation Error Lower Upper
Bound Bound
Less than (1) year 161 47.4845 4.76459 .37550 46.7429 48.2261
1-5 years 644 47.6304 4.32290 .17035 47.2959 47.9649
6-16 years 1068 47.6948 4.38671 .13423 47.4314 47.9581 0.215 .886
More than 17 years 141 47.4468 4.20446 .35408 46.7468 48.1468
Total 2014 47.6400 4.38282 .09766 47.4485 47.8315
When these results are analyzed, it is seen that in Table 8, with tax amnesty after declaring its independence in 2008.
the average scores received by the One-Way ANOVA With the continuation of fiscal reforms the Kosovo
analysis to determine the taxpayers’ participation level government has handled tax amnesty as part of its fiscal
differences by duration as taxpayer related their program. And in 2015, along with reforms, the
judgments about tax amnesty effects are; 47.48 points for government announced tax amnesty, allowing the
taxpayers’ with duration less than (1) year, 47.63 points individuals and business to pay previous unpaid taxes.
for taxpayers’ with duration 1-5 years, 47.69 points for The positive effects of the tax amnesty in the country
taxpayers’ with duration 6-16 years, and 47.44 points for were considered to be multidimensional. First of all,
taxpayers’ with duration more than 17 years. meeting government needs for liquidity from revenues
Since the value of F = 0.215 and P = .886 were P >0.05, collected from tax amnesty, liquidity insurance for both
the H4 hypothesis was rejected because there was not business and entrepreneur thanks to the possibility for
statistically significant differences between taxpayers’ amnesty of liabilities accumulated for more than a decade.
related their judgments about tax amnesty effects. All this was coupled with new jobs for the unemployed in
the private sector.
5. CONCLUSION In this study based on the taxpayers’ judgments regarding
Kosovo as one of the last places which is passing social, economic and financial effects of tax amnesty has
transition period in Southeast Europe its fiscal policies are been determined the five most important tax amnesty
among the most favorable in the region. Political changes effects. The five most important judgments about tax
in Kosovo from the beginning until the declaration of amnesty effects are as follows;
independence in 2008 are oriented to the free market - Tax amnesties has turned many businesses into
economy. The laws of the Republic of Kosovo provide a economic life and provided revenue flow to the state,
suitable business environment under the free trade - Tax amnesties provide a rapid income flow in closing
economy practices. These laws regulate trade security, budget deficits,
investment and private property in the country. Also, they - Tax amnesty reduced workload of tax office and
provide equal rights for all domestic and foreign judiciary,
investors. In the same time the phenomena such as fiscal - Repeated tax amnesties reduced the taxpayer
evasion and bribery are continuing to be fought compliance of honest taxpayers’,
continually. - Tax amnesties reduced tax compliance, leading to an
While governments around the world consider tax increase in the informal economy.
amnesties as traditional means of their fiscal programs,
the Republic of Kosovo for the first time is recognized
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 International Journal of Management Excellence
Volume 13 No.2 August 2019

Between taxpayers’ who participated on the survey [6] Doğan, Z., Besen, R. (2008), Vergi Aflarının
related their judgments about social, economic and Mükellefler Üzerindeki Etkisinin Tespitine İlişkin Bir
financial effects of tax amnesty; Araştırma, Ankara: Maliyet ve Hukuk Yayınları.
- It has not been found any statistical significant difference [7] Gergerlioğlu, U. (2017). The Analysıs of Attıtudes of
by their gender. Tax Amnesty Nonbenefıcıarıes and Tax Amnesty
- It has been found statistically significant differences Benefıcıarıes: Evıdence from Turkey, Journal of Life
between taxpayers' by their age. It can be concluded that Economics, (SSRN), 33-50.
this differences about tax amnesty affects are found to be [8] Gunawan, A., Sukartha, M. I. (2016). Pengaruh
higher between younger taxpayers’ and taxpayers’ over Persepsi Tax Amnesty, Pertumbuhan Ekonomi Dan
61 years. Transformasi Kelembagaan Direktorat Jenderal Pajak
- It has not been found any statistical significant difference Pada Penerimaan Pajak, E-Jurnal Akuntansi
in terms of their education. Universitas Udayana, 17(3), 2036-2060.
- It has not been found any statistical significant difference [9] Ibrahim, A. M., Myrna, R., Irawati, I., and Kristiadi,
in terms of their duration as taxpayer. B. J. (2017). A Systematic Literature Review on Tax
Rather than using tax amnesty as a tool of collecting state Amnesty in 9 Asian Countries. International Journal
revenues, it is imperative to undertake fundamental of Economics and Financial Issues, 7(3), 220-225.
changes to the Kosovo tax system in order to avoid using [10] Moser, C., Kalton, G. (1979), Survey Methods In
the tax amnesty as an alternative tool of collecting Social Investigation, 3 Edition, UK, Darmouth
revenues. For this purpose, in the light of the information Publishing Co. Ltd.
obtained from the explanations made in the theoretical [11] Nuryati, T., Pratama, B. (2018). Tax Amnesty as a
part of the study, it will be more useful to perform the Contribution to the Improvement of Taxpayers’
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- Efforts should be made to extend the tax base to a Management Research, Vol. 73, 234-237.
reasonable level by decreasing the tax rates, [12] Pravasanti, A. Y. (2018). Dampak Kebijakan dan
- Making tax laws simple and understandable, Keberhasilan Tax Amnesty Bagi Perekonomian
- The government should develop alternative policies Indonesia, Jurnal Ilmıah Akuntansı, XVI (1), 84-94.
to turn the informal economy into a regular economy, [13] Said, L. (2018). Implementation of Tax Amnesty and
- The effectiveness of tax audits should be increased, Its Impact on Indonesia Economics, Reports on
- Measures should be taken against tax evasion, Economics and Finance, 4(1), 45-56.
- Taxpayers' tax should be made according to their
financial strength, arrangements should be made to [14] Villalba, S., Miguel, A. (2017), On the Effects of
ensure that those who earn more pay more, while Repeated Tax Amnesties, Journal of Economics and
those who earn less pay less. Political Economy, Vol. 4, No. 3: 285-301.

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