Drivers of Tax Non-Compliance: A Systematic Review of Evasion and Avoidance

Aims: This study aims to systematically review and synthesize existing literature to identify and analyze the key factors influencing tax evasion and tax avoidance. It seeks to categorize these factors across the common themes and dimensions to provide a better understanding on what drives tax evasion and avoidance behaviors. Additionally, the article intends to underscore the impact of these factors for policymakers and the tax authority of the Philippines, the BIR, in developing policies and strategies to curb tax non-compliance. Finally, this study aims to offer an integrated framework to support future research. Study Design: This study adopts a qualitative methodology through the use of a systematic literature review. Place and Duration of Study: The study was carried out in Bacolod City over a two-month period, from March to April 2025. Methodology: This study employed a qualitative research design, utilizing a systematic literature review approach to methodically investigate, critically evaluate, and synthesize existing research on the subject. Thirty-seven articles were included after screening based on predefined inclusion and exclusion criteria. Results: From this analysis, two major themes were explored: factors that influence tax evasion and factors that influence tax avoidance. Under factors that influence tax evasion, the following sub-themes emerged: traditional factors, institutional and business factors, socio-cultural factors, economic factors, and behavioral and other factors. Under factors that influence tax evasion, the sub-themes that emerged were corporate social responsibility, corporate governance, firm size and component, board size and component, audit quality, government regulation and political connections, and earnings management. Conclusion: By systematically mapping the drivers of tax evasion and tax avoidance, this review reveals tax evasion as a product of institutional, cultural, economic, and psychological factors, while avoidance strategies are closely tied to corporate governance, firm attributes, regulatory oversight, and financial reporting practices. The analysis highlights the necessity of multi-layered policy reforms targeting both systemic vulnerabilities and firm-level incentives to curb non-compliance effectively.