OECD Tax Trust Report: High Morale in India, But 'Everyone Does It' Risks Compliance
SDG 16: Peace, Justice and Strong Institutions | SDG 17: Partnerships for the Goals
Ministry of Finance | Central Board of Direct Taxes (CBDT)
The OECD/ACCA/IFAC Public Trust in Tax 2025 report, surveying 29 countries with a deep focus on Asia, provides key insights into how taxpayers perceive their fiscal systems, highlighting trust dynamics, views on equity, and the role of tax policy. India was included in the South Asia region sample.
Key Findings on Public Perception:
Fiscal Contract Strength: India and Bangladesh respondents showed positive perceptions of the fiscal contract, often agreeing that taxes are spent for the public good. Across Asia, the view that public services and infrastructure are a fair return for taxes paid is much stronger than in Western Europe.
Trust Dynamics:
Most Trusted Sources: Professional tax accountants are the most trusted source of tax information in almost all surveyed countries. In India and Pakistan, tax lawyers were among the most frequently consulted sources of tax information.
Least Trusted Sources: Politicians, media, and social media were consistently the least trusted sources globally.
Trust in Government: India is one of the few countries globally (all in Asia) where politicians received a net positive trust rating (net 6% trust).
Equity and Compliance:
Fairness: Asian countries are significantly more likely to perceive the tax system as equitable and in proportion to taxpayers’ ability to pay, despite tending to have less progressive tax systems than Western counterparts.
Tax Evasion: However, respondents in South Asia (the region containing India) were the region most likely to justify cheating on taxes because “everyone does it“ (22%).
Policy Support: Respondents across Asia, and particularly in India, strongly supported using tax policy to achieve broader objectives, with tax incentives for green energy projects being the most popular incentive in 84% of Asian countries.
Policy Relevance
This report offers crucial, data-driven insight for the Ministry of Finance and tax authorities, showing that while India enjoys a relatively high degree of tax morale and public trust in its digital tax services, serious policy intervention is required in two core areas: equity perception and information flow. Authorities must leverage the high trust in professional accountants (the most trusted source) to improve taxpayer education and combat the damaging perception that non-compliance is normalized (the “everyone does it” justification).
What is the Fiscal Contract? The fiscal contract is the implicit or explicit understanding at the heart of most tax systems that citizens willingly pay taxes in exchange for the effective provision of public services and infrastructure by the government. The perception that tax revenues are spent for the public good and that the return on taxes is fair is fundamental to maintaining high tax morale and willingness to comply.
Follow the full news here: OECD (2025), Public Trust in Tax 2025: Asia and beyond