Role of Education In Combating Tax Evasion: The Moderating Role of Digitalization

Abstract

Tax evasion remains a significant challenge for developing economies, including Pakistan, where compliance rates are low despite numerous policy interventions. This study examines the role of education in combating tax evasion while assessing the moderating impact of digitalization in enhancing taxpayer awareness and compliance. The study applies correlation and regression analyses using Stata software to assess the relationship between education and tax evasion behavior while incorporating digitalization as a moderating factor. The findings reveal a significant negative relationship between education and tax evasion, indicating that higher levels of education contribute to improved tax compliance. Furthermore, digitalization significantly strengthens this relationship, suggesting that technological advancements in education, such as e-learning platforms and digital tax awareness campaigns, enhance taxpayers' understanding of tax laws and compliance obligations. The study’s findings offer theoretical and practical implications for policymakers, tax authorities, and educators in designing effective tax education programs leveraging digital platforms. Future research should explore primary data sources, alternative methodologies, and broader geographic contexts to enhance the generalizability of these findings.