THE ROLE OF TAX COMPLIANCE IN INCREASING TAX REVENUES: BEHAVIORAL AND DIGITAL APPROACHES

The sustainability of modern public finance is shaped by the relationship between the state’s tax collection capacity and taxpayers’ level of voluntary tax compliance. Tax compliance is not merely the fulfillment of legal obligations; it is a multidimensional behavioral phenomenon that arises from trust in the tax system, perceptions of fairness, tax morale, and institutional transparency. Instances of noncompliance—such as underreporting income, failure to file returns, or intentional violations of tax legislation—intensify the tax gap problem in public finance and narrow the tax base. Therefore, enhancing tax compliance is a strategic necessity for maintaining economic stability, reducing informality, and ensuring the efficient financing of public services. Theoretically, tax compliance is explained through both economic and behavioral approaches. While the economic perspective evaluates taxpayers’ decisions through rational choice and cost–benefit analysis, the behavioral perspective emphasizes the role of psychological incentives, social norms, and trust in the taxpayer–state relationship. Empirical evidence from Türkiye indicates that punitive measures and audit policies alone are insufficient; rather, tax morale, risk perception, and a sense of fairness are more decisive in shaping compliance behavior. This study examines the policy instruments that promote tax compliance within the framework of educational and awareness-raising initiatives, digitalization and administrative facilitation reforms, as well as punitive and reward-based mechanisms. It also discusses the conflicting effects of tax amnesties and restructuring schemes on voluntary compliance. The analyses reveal that the tax administration must evolve from a strictly sanctioning authority into a taxpayer-oriented service provider. Digital transformation strengthens administrative capacity and transparency by reducing compliance costs; however, it simultaneously introduces new ethical and data protection challenges. In conclusion, efforts to improve tax compliance must be pursued through the institutional reinforcement of justice, transparency, and trust, supported by behavioral economics-based incentive mechanisms. This holistic approach is essential for achieving sustainable public revenues and enhancing overall social welfare.