2023 Start

PERCEPTION OF COLLEGE STUDENTS AND

PROFESSORS ON ETHICAL CONSIDERATIONS OF
TAX AVOIDANCE

2 BSA - 1
Cadaño, Ma. Fatima Audrey F.
Caluna, Conrad Joemar M.
Carpio, Jhaszvan Madison R.
Cuya, Julian Vic S.
Daga, Jaira C.
Dela Cruz, Michelle Mae U.
Fadrilan, Kenneth Lorenz

Subject : ETHICS Submitted to: DR. MARISSA R. OPERARIO

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ABSTRACT
This study aims to provide insights into the ethical challenges and dilemmas arising from tax avoidance, emphasizing the
importance of balancing the advantages of tax avoidance with addressing these ethical concerns. The researchers conducted a
survey among 24 random students and 6 professors of a certain university divided into two(2) stratas; Strata A is composed of
12 students and 3 professors that are studying/studied tax related courses and Strata B is composed of 12 students and 3
professors that are not studying/did not studied tax related courses to address the moral and ethical considerations of tax
avoidance. Researchers concluded that students and professors perceive tax avoidance more from a moral standpoint than deep
knowledge. Most recognize its legality but lack understanding of how it works, which is by involving and taking advantage of
laws to lower tax obligations. Respondents hold diverse views, acknowledging legality and fairness yet raising ethical
concerns, especially about fairness and societal impact. Despite varied acceptance levels, awareness of its ethical implications
strongly influences respondents' attitudes towards tax avoidance.
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INTRODUCTION
Tax avoidance, as defined by Tabag, involves legally minimizing tax liability within the bounds of tax laws through strategies
such as utilizing incentives, exemptions, and deductions. It is considered lawful and legitimate, requiring adherence to existing
tax laws in good faith and at arm's length. Unlike tax evasion, tax avoidance is not illegal. However, debates on its ethics arise,
with concerns that exploiting legal loopholes may be perceived as not contributing a fair share to society. Tax policies are often
revised to address these concerns and promote a more equitable distribution of the tax burden (TABAG, 2023, 35; Lacy, 2022).
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BACKGROUND OF THE
STUDY
Attitudes toward tax avoidance have evolved over time, attracting considerable academic and public attention. The ethical
dimensions of tax avoidance are crucial in contemporary economic and ethical discussions. A study emphasizes the need for ethical
considerations in teaching basic tax concepts at the higher education level, revealing a lack of awareness among students and staff
about taxation fundamentals. Stakeholder involvement and addressing ethical issues are deemed vital for enhancing the design and
implementation of tax-related education, particularly focusing on tax evasion and tax avoidance. Exploring the perceptions of
students and professors regarding the ethical aspects of tax avoidance is a significant area of study, holding societal and academic
value (Cadsby et al., 2023).
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RESEARCH PROBLEMS
To understand how college students and professors perceive ethical considerations of Tax
Avoidance as a way to decrease or avoid tax obligations, the researchers introduces the following
questions:

01
To what extent are the students and professors aware of the ethical implications associated with tax avoidance?

02
How do the students and professors perceive tax avoidance?
03
What factors contribute to the acceptance or rejection of tax avoidance as an ethically justifiable action among the
students and professors?
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SIGNIFICANCE OF THE
STUDY
Professors: This research will provide Students: This research will benefit Future Researchers: This paper can
information about the awareness and students by raising awareness about serve as an additional reference to
understanding of ethical ethical considerations surrounding tax have a deeper understanding and to
considerations related to Tax avoidance, enabling them to make develop further investigation about
Avoidance among the Professors. This informed decisions in their personal the perspective of Students about the
information can help educators create and professional lives.It develops a Ethical consideration of Tax
lessons that highlight making moral sense of accountability and critical Avoidance.
decisions when handling finances as thinking about the ethical effects of
well as to their tax obligations. financial behaviors.
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SCOPE AND
DELIMITATION
OVERVIEW
This study focuses on the extent of understanding of the with regard to the ethical implications associated with Tax Avoidance. The
data collection will be conducted to the students and professors of a certain university who will represent the population.

PROPONENTS
This study will not cover other problems that are not considered as questions related to the ethical implications on Tax Avoidance.
Each of the respondents is given the same questionnaires to answer. The results of this study will be applicable only to the
respondents of this study and will not be used as a measurement to the knowledge of students about the topic who do not belong to
the population of this study. The main source of data will be the questionnaire, which is prepared by the researchers.
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ETHICAL CONSIDERATIONS
DEFINITION OF the concepts and procedures that researchers must
adhere to in order to make sure that their studies

TERMS are carried out in an ethical and responsible

manner. (Hassan, 2023).

ETHICAL TAX AVOIDANCE TAX BURDEN TAX CODE

IMPLICATIONS used to describe a set of
the employment of legal the duty to pay taxes
rules and legislation that
strategies to reduce an directly or indirectly,
the implication of specify the public's
individual's or business's regardless of the actual
morality in any given obligations and rights
income tax liability. taxpayer. (Vaidya, 2023)
behavior or choice. with regard to taxes.
(Kagan & Kvilhaug, (Howard, 2022)
(Lassen, 2022) 2022)
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REVIEW OF RELATED LITERATURE

The Legal Foundation and Morality of Tax Avoidance

This essay examines the ethical and legal dimensions of corporate tax avoidance, using the United Kingdom as a case study where
sophisticated tax planning is employed to shield businesses from perceived high taxes. The research, drawing on the new sociology of
morality, incorporates data from interviews with tax professionals, lawmakers, and government officials, along with information from the
Parliamentary Commission on Banking Standards. Findings reveal that businesses can diminish future tax obligations through effective tax
planning. The essay delves into the moral implications of tax avoidance, presenting diverse perspectives from various stakeholders. It
underscores the necessity for regulatory reforms and a nuanced understanding of the intricate issues surrounding corporate tax avoidance
(Lokanan, 2023).

Tax Avoidance As A Way to Minimize Tax Expense

Tax expense is one of the most significant expenses that affects the profits of a company. Thus, companies will always have the tendency
to reduce their expenses. Regulators also understand this situation by giving incentives and loopholes in tax regulations to provide options
in the companies’ efforts to minimize the amount of tax to be paid, as long as they are within the legal corridor. However, the efforts will be
considered as tax evasion when it hits the gray area and potentially violate taxation rules. (Watson, 2014)
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Tax Avoidance as an Unethical Act

In this study, tax avoidance is considered as an unethical act because it has an opportunistic nature and can potentially violate the
applicable regulations. Tax avoidance act is a deliberate action by taxpayers who wish to minimize the amount of tax to be paid; moreover,
their intention is not in compliance with the tax rules. For a country, tax avoidance causes the country to suffer losses that were not
previously considered due to its tendency of violating the regulations. For companies, tax avoidance puts them at risk of receiving tax
sanctions and can damage the companies’ reputation. Tax avoidance practices tend to flare in developing countries because they have low
investors’ protection and weak tax infrastructure, thus opportunistic managers have more flexibility to take tax avoidance actions. (Filho,
2014)

Anti - Avoidance Policy Proposal

The essay highlights the perceived injustices and inconsistencies in the application of anti-avoidance policies, leading to an unfair
environment for taxpayers. The author contends that categorizing all tax avoidance transactions as fraudulent penalizes individuals unaware
of any illegal acts. The absence of clear definitions for concepts like "sham" transactions complicates tax computation. Without an express
law against tax avoidance, the author argues that the current anti-avoidance policy may not align with the constitutional requirement of
uniform taxation. To address these issues, the essay proposes the enactment of a specific anti-avoidance law, drawing inspiration from
international models. The suggested law should define discouraged transactions, outline triggering conditions, and specify how tax should
be computed for prohibited transactions without invalidating the entire transaction (Sy, 2023).
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Ethical Perceptions of Tax Avoidance

Ethics is related to tax avoidance, with the understanding that ethics is attached to someone who can distinguish between right and wrong
to encourage someone to do good things. The concept of right and wrong about behavior gives information about morality and immorality,
how an individual thinks and behaves towards others, and how others think and behave towards another; this is a concept of ethics. When
taxpayers have ethics, these taxpayers understand very well how tax avoidance is morally wrong because it may be in compliance with the
regulations, the tax burden set upon them is not fully utilized, which can encourage taxpayers to avoid tax. In several cases of tax
avoidance, there have been weaknesses with indications stating that the system has been made fairly and also taxpayers get something in
return for their taxes. (Purnamawati et al., 2023)
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METHODOLOGY
RESEARCH DESIGN
Researchers employed a descriptive case study as the research design, concentrating on participants' perceptions and
awareness of information related to tax avoidance. The study specifically explores the ethical aspects of tax avoidance,
particularly how it operates, and its impact on individuals such as business owners and companies who benefit from reduced
tax obligations. Data was collected using survey questionnaires to gauge participants' perspectives on tax avoidance.

RESEARCH ENVIRONMENT
This study is conducted among the students and professors of a certain university. Online platforms were used to deliver
survey questions for them to complete.
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RESEARCH RESPONDENTS
The respondents of the study are among the college level students and professors of a certain university The researchers used
stratified random sampling in choosing the respondents. Stratified random sampling is a method of sampling used to select a
representative sample from a population. It involves dividing the population into homogeneous subgroups called “strata”
based on certain characteristics that are relevant to the study. Therefore, each college-level student and professor in the
university has an equal chance of being selected and being part of the research. The researchers chose this type of sampling as
it is an effective way to avoid any form of sampling bias. (Beer, 2023)

RESEARCH INSTRUMENT
To get the appropriate data needed, the researchers provided survey questionnaires among the students and professors of a
certain university. The survey questionnaire contains questions relating to the perspective of the students and the professors
regarding tax avoidance. It contains open-ended questions that allow respondents to answer it based on their understanding
and give them the freedom to express themselves freely. Their responses/feedback determined how they perceive the ethical
challenges and concerns associated with arguments on tax avoidance.
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GATHERING OF DATA
In order to gather important data needed and to be able to complete the research, the researchers formulated a survey
questionnaire for the respondents which will be conducted between the last week of November and the first week of December
of 2023. The researchers request the consent and approval of the students and/or the professors that serve as participants in this
research before proceeding to answering the survey questionnaire that the researchers will be providing. After the approval of
the request, the researchers will provide an online link to be used as the platform where the respondents will answer the survey
questionnaire. After collecting the questionnaires, the researchers will tally, and analyze their responses to answer the research
questions.
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SUMMARY OF FINDINGS
1. What is the profile of the respondents of the university in terms of:
1.1 University Role; the majority of the respondents are students.
1.2 Year Level; the majority of the respondents are second year students.
1.3 Program; Majority of the respondents are from courses other than BS Accountancy but among
all the programs, most respondents came from BS Accountancy.
1.4 Academic Involvement in Tax related subjects; majority of the respondents are not enrolled nor
teaching in any subject related to tax.
1.5 Informations related to Tax Avoidance; most of the respondents are only aware of some of the
information presented in the survey.
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SUMMARY OF FINDINGS
2. Perception of the respondents regarding the legality of Tax Avoidance
2.1 The majority of the respondents are aware that Tax Avoidance is legal.
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SUMMARY OF FINDINGS
3. Perception of the respondents regarding how Tax Avoidance works in terms of:
3.1 Limitation; the majority of the respondents are aware of one of the limitation of tax avoidance
which is the exaggeration of business expenses.
3.2 How it actually works; the majority of the respondents are not aware how tax avoidance works,
which is by taking advantage of the law that can reduce the taxpayer’s obligation.
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SUMMARY OF FINDINGS
4. Perception of the respondents on tax avoidance in terms of:
4.1 Social Responsibility; majority of the respondents perceive tax avoidance as an equivalent of
evading social responsibility while a handful are on neutral standing in this matter.
4.2 Employment of PWD and Senior Citizen as a way of tax avoidance; majority of the
respondents perceives this type of employment as a way of tax avoidance while a handful are on
neutral standing in this matter.
4.3 Fairness; majority of the respondents perceives tax avoidance as a fair way of reducing a
taxpayer's obligation while a handful are on neutral standing in this matter.
4.4 Legality; majority of the respondents perceive the legality of tax avoidance to stay as it is,
which is a legal way to reduce taxpayer’s obligation while a handful are on neutral standing in this
matter.
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SUMMARY OF FINDINGS
5. Perception of the respondents on taxpayers that avoid their taxes.
5.1 Majority of the respondents don’t blame this type of taxpayers
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SUMMARY OF FINDINGS
6. Perception of the respondents regarding the Ethical Implications of Tax Avoidance.
6.1 The majority of the respondents perceives that the number 1 ethical implication of tax
avoidance is that it is unfair, secondly is that it hurts the trust of the people to the government's
enforcement of government law and by doing so it is somehow hurting the society.
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CONCLUSION
The majority of students and professors are aware of tax avoidance as legal but not fully aware of its ethical
implications. They perceive it as unfair, a breach of trust in government enforcement, and negatively impacting
society. However, a significant proportion sees it as equivalent to evading social responsibility. The acceptance or
rejection of tax avoidance is influenced by factors such as fairness, belief in its legality, and awareness of its
implications. Academic involvement and information about tax-related subjects also influence the stance taken.
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RECOMMENDATIONS
STUDENTS INSTRUCTORS AND FUTURE SOCIETY
Learners should explore EDUCATIONAL RESEARCHERS AND Tax evasion involves exploiting
academic journals, articles, INSITUTIONS ACADEMICS loopholes or violating laws to
and reputable resources to Research on ethical reduce tax burden. To maintain
understand tax avoidance Educational institutions can
implications of tax avoidance a fair society, follow tax rules.
perspectives. They should enhance students' ethical
in education is crucial for Consult a certified tax expert or
also understand legal and education on tax avoidance by
taxpayers' understanding. financial advisor for legal
ethical aspects, distinguishing providing training, workshops,
Collaboration between advice and guidance on tax
between tax avoidance and and lectures by experts in law
researchers, educators, planning.
evasion, and reflect on their and tax ethics, ensuring accurate
legislators, and professionals
own views to enhance their and relevant information and
is needed to develop thorough
understanding. practical application of tax
information on this issue.
strategies.
Group 2 Finish

THANK YOU

Subject : ETHICS Submitted to: DR. MARISSA R. OPERARIO