Determinants of tax evasion: Evidence from Libya

Governments around the world are continually looking for ways and means to improve the level of tax compliance by their citizens. Tax revenue is the major source of income for many countries. The purpose of this study is to investigate the factors influencing tax
evasion among taxpayers from the Libyan perspective. This study is based on five
variables that are used to determine the factors that affect tax evasion in Libya. The five variables that are measured in this current study are: education level, tax rate,
corruption, penalty rate and the Islamic religious perspective. The data were collected
through the distribution of questionnaires to 277 respondents in Libya and processed using Statistical Package for Social Science (SPSS) software for the purpose of this study. By using correlation and regression analysis, the findings of the study show that there is a positively significant relationship between tax rate, corruption and penalty rate and tax
evasion. On the other hand, education level indicates a negative but insignificant
correlation with tax evasion. There is no significant correlation between Islamic religion
and tax evasion but the relationship is positive