Letter of the Law: Perceived guilt ... why are more Hongkongers inclined to evade tax than shoplift?

Would people take a coveted item from a department store if no one were to find out?

In a recent telephone survey under a funded research on Hong Kong’s rule of law culture in which I took part, 80 per cent of respondents said “No”.

This sounds consistent with a common perception that Hong Kong people are generally law-abiding. Yet, abidance may be circumstantial as suggested by their response to another statement: “Small business owners would not engage in tax evasion.” This time, 60 per cent disagreed, 20 per cent agreed, with per cent saying they were “unsure”.

Given theft and tax evasion are both criminal offences, why are people more inclined to commit one but not the other?

An answer may lie in public perceptions towards street crime and white-collar crime. While it is beyond the scope of our project, studies in the US provide interesting insight.

First, researchers found that street criminals – such as petty thieves – are thought to be more likely to be caught and receive harsher sanctions than white-collar ones such as tax evaders. The clandestine manner in which the latter conduct their crime means the likelihood of prosecution and conviction remains small compared to, for example, a pickpocket.

Data also revealed that educated and high-income earners perceive a lower degree of certainty and severity of penalty for white-collar than street crimes. It shows those who are more likely to have access to white-collar crime opportunities tend to downplay the very chance of getting caught and being seriously punished. Systemic difficulties in detecting crimes such as tax evasion strike at the “deterrent” effect that is a core element of criminal justice.