Public Trust in Tax: A Global and Regional Imperative for Fair and Effective Systems

On January 28, 2025, a diverse group of key stakeholders in the tax policy world discussed how trust in taxation plays a pivotal role in equitable and sustainable development at the launch webinar of the new report Public Trust in Tax 2024: Latin America and Beyond, jointly hosted by IFAC, ACCA and the OECD. With 330 live participants from over 70 jurisdictions, the event demonstrated the importance of trust in taxation to all of us.

See the full recording:

It is also available in Spanish here:

Trust in Tax: A Practical Necessity

"Trust is not just an abstract ideal, or an aspiration; it is a practical necessity; it is essential to the effective functioning of tax systems." These words from Lee White, Chief Executive Officer of IFAC, set the tone for the webinar, the culmination of a collaborative effort between the OECD, ACCA (the Association of Chartered Certified Accountants), and IFAC (the International Federation of Accountants), illustrating the three organizations’ shared commitment to advancing evidence-based tax policy, fostering good governance, and addressing pressing global challenges.

Manal Corwin, Director of the OECD Centre for Tax Policy and Administration, stressed that “building and maintaining trust is vital to establishing effective tax systems, as without it, the high levels of voluntary compliance, on which the most effective tax systems rely, are not possible”. “While building trust may be challenging, the alternative of building a tax system based on coerced compliance is unsustainable,” she added. 

Helen Brand, Chief Executive of ACCA underlined that strengthening tax morale isn’t just about increasing compliance; it’s about fostering a culture of fairness and accountability that benefits societies as a whole. Quoting Edward Troup, the former Head of the UK's Revenue Authority, she said that "trust arrives on a donkey but leaves on a tiger," emphasizing the fragility of public confidence.

Professor Rita de la Feria, Chair of Tax Law at the University of Leeds, noted that “this is not just a question of trust in the tax system, but it is about people's perceptions of what is going well and what is going badly. It is more than just about how our tax systems are functioning. It is about how people feel about taxes. And how people feel about taxes reflects largely how people feel about how society is working out for them.”

“For too many people, the tax experience does not match their expectations, be it in the equity in the system, the services received in return for their taxes, or whether their views are listened to”, concurred Joseph Stead, Senior Policy Analyst on Tax and Development at the OECD.

A Regional Lens on a Global Issue- what are the drivers for (dis)trust?

Jason Piper, Head of Tax and Business Law at ACCA, presented the main findings of the joint ACCA, IFAC and OECD 2024 Public Trust in Tax report. Covering 26 countries and offering insights from Latin America, Africa, and Asia, the latest edition of the Public Trust in Tax series takes a closer look at regions where challenges with tax systems are most pronounced.

He noted that "in Latin America, satisfaction with tax systems is among the lowest globally. Many citizens perceive tax systems as inequitable and inefficient, underscoring the urgent need for evidence-based reforms, greater transparency, and deeper engagement with all stakeholders”.

For David Jerezano Carvajal, Senior project manager at Centro Interamericano de Administraciones Tributarias (CIAT) " the joint report rightly points out the trends in Latin America, where citizens hold a more negative perception of taxes. This is compounded by factors such as social inequality, corruption, and a lack of clarity regarding the use of tax revenues. These elements create a disconnect between taxpayers and the fiscal system”.

David Jerezano Carvajal at the PTIT conference

“ IDB’s flagship report Trust: The Key to Social Cohesion and Growth in Latin America and the Caribbean shows that while distrust in government is a global issue, the degree of distrust is even higher in Latin America and the Caribbean and trust levels in Latin America and the Caribbean have seen a steep decline over recent decades”, confirmed Martín Ardanaz, Senior Specialist in the Fiscal Management Division at the Inter-American Development Bank (IDB). According to the Latinobarómetro survey, less than three in ten citizens in Latin America and the Caribbean expressed trust in their government during the period 2010–2020.

"When it comes to challenges, the joint ACCA-IFAC-OECD report identifies two main issues for tax authorities in Latin America: the perception of being coercive and the lack of taxpayer-friendly processes. This is reflected in the finding that only 9% of respondents see tax administrations as facilitators of compliance” noted David Jerezano Carvajal. “To overcome these challenges, it is essential to invest in technology to simplify processes such as tax filing and payment; strengthen tax education programs to promote a better understanding of tax obligations and adopt a more human-centric approach in interactions with taxpayers, prioritizing respect and empathy."

In parallel, Joseph Stead highlighted the link between trust and economic development. "A tax system that is perceived as fair and transparent contributes not just to higher compliance rates but also to broader economic stability and growth.

Striking the right balance between tax morale & compliance and fairness

"Understanding the factors that influence tax morale and compliance is critical to shaping effective policy," said Manal Corwin, Director of the OECD Centre for Tax Policy and Administration. "Trust in tax systems determines whether citizens see taxation as a civic duty or an unfair burden."

Professor Rita de la Feria underscored the importance of designing tax policies that are seen as equitable and effective. "Public trust in tax hinges on perceptions of fairness versus actual fairness. If taxpayers feel the system is unfair or that some individuals or corporations can avoid their obligations, compliance will suffer," she explained. She also emphasized the need for clear communication from governments on how tax revenues are utilized (what do I get for my taxes?), the importance of benchmarking (fair in relation to what?), as well as the need for a “hierarchy of fairnesses” and fairness trade-offs with other policy aims (fair taxation or environmental protection for example?).

Expanding on this theme, Martín Ardanaz, emphasized two key dimensions: equity and reciprocity. "When taxpayers perceive the tax burden as unfairly distributed, compliance drops. Conversely, when they see a clear link between tax revenues and public goods, compliance improves," he explained.

“In order to enhance trust for increased tax compliance, policy makers need to consider strategies that are evidence-based and context-specific. Successful strategies usually identify the following elements: the specific dimensions of trust to be targeted and the taxpayer segment; the roots of distrust; and finally, the concrete solution to the problem that is relevant from the taxpayer point of view”, Martin Ardanaz further recommended.

Moving Forward: Building Trust Through Global Action and Collaboration

For Jason Piper, “one of the key things that has come out of this year's trust in tax survey is the importance of communication about tax and how people learn about it”.

“People get their information on tax from a range of sources, from tax professionals to friends and families. Whether we work in tax or not, we are shaping people's views and trust in tax. We thus all need to make sure we're getting it right! The combination of tax administrations bringing the technical/process side, together with partners who are trusted and/or can facilitate the interactions is a really powerful combination”, Joe Stead emphasized.

“Work of improving trust is indeed not exclusive to tax administrations”, echoed Martin Ardanaz. “Gathering evidence on how taxpayers perceive the key actors in the system is crucial, and the data contained in the IFAC/ACCA/OECD report is an essential piece for devising effective policy responses to this high-priority issue of public trust in tax”, he added.

2024 Public Tax Survey about how accounts are viewed

The 2024 Public Trust in Tax survey confirms that professional tax accountants are the most trusted source of tax information globally. “This trust places an enormous responsibility on our profession to act with integrity, to bridge the gap between governments and taxpayers, and to uphold the highest standards of ethics", said Lee White.

"By equipping accountants with the tools and knowledge to support ethical tax practices, we contribute to fairer and more transparent tax systems. Our role is not only to communicate effectively but also to act as an honest broker—engaging with governments and taxpayers to create a fairer, more effective tax system" Helen Brand went further.

The insights shared during the discussion moderated by  Scott Hanson, Director of Policy and Global Engagement at IFAC, reaffirmed the need for global collaboration in addressing trust deficits in tax systems.

Experts also agreed that building trust requires a comprehensive approach, combining enforcement with transparency and ensuring that tax revenues are visibly linked to public goods and services, fairness, increased communication between tax authorities and citizens and efficient service delivery. Digital transformation, cooperative compliance programs, and evidence-based policy reforms emerged as key tools and strategies for strengthening public confidence in taxation and reducing corruption, another important factor affecting trust in tax.

Watch the key recommendations from our experts: